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Acknowledgements
Vanuatu’s Renewables Readiness Assessment (RRA) could not have been carried out without the assistance
of the Vanuatu Department of Energy, in particular Jesse Benjamin, Chris Simeleum, Jerry Lapi and Leo Moli. In
data gathering and on-site assistance, Peter Johnston made a greatly appreciated contribution. Staff at UNELCO
Vanuatu Ltd., the Utilities Regulatory Authority and local businesses and non-governmental organisations also
aided greatly, both with preparations and through participation in RRA discussion groups. Special thanks to
Herbert Wade for his valuable support and inputs to the report.
Authors: Yong Chen (IRENA), Gürbüz Gönül (IRENA) and Herb Wade (consultant).
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VANUATU
RENEWABLES READINESS
ASSESSMENT
II
Ghana
Vanuatu
FOREWORD
from the Ministry of
Climate Change and
Natural Disaster
The Ministry of Climate Change and Natural Disaster has the great honour and pleasure to introduce this
Renewables Readiness Assessment (RRA) report.
Vanuatu has been a supporter of the International Renewable Energy Agency (IRENA) from the beginning,
and we were particularly excited about the opportunity to engage in such a process. This assessment has
been very important, because for the first time it has brought together Vanuatu’s energy suppliers, energy
regulators and energy users as a group to discuss and develop specific actions. These will help us meet
National Energy Road Map (NERM) targets and reduce our dependence on imported fuels.
Vanuatu is blessed with abundant renewable energy resources, including solar, geothermal, wind, biomass
and biofuel. However, it is highly dependent on imported fossil fuels. In recent years, the high cost of that
imported energy has seriously hampered social and economic development. Reducing the need to import
expensive fossil fuels, therefore, has been recognised as important to Vanuatu’s future.
In 2013, the government adopted the NERM, which establishes a path to greater energy independence. In
making this the basis for our energy policy, we started out by setting realistic targets for replacing imported
fuels with locally available renewable energy sources. Renewable energy development can be more fully
achieved when there is more collaboration between the government, the private sector, community leaders
and land owners.
Vanuatu has already started some of the actions recommended in this RRA. We have begun major
development of the solar, wind, geothermal, biofuel and hydropower resources present in our country. The
timing of the assessment could not be better, and we expect that its recommendations will form the core of
our plan of action to reach the targets of the NERM. The Ministry would like to express our gratitude to IRENA
for making this possible, and we look forward to a long and fruitful relationship in the future.
Ministry of Climate Change and Natural Disaster
Republic of Vanuatu
Renewables Readiness Assessment III
IV Vanuatu
Ghana
FOREWORD
from the IRENA
Director-General
Across the Pacific, small island states face daunting costs for fuel imports and recurrent risk from global
oil price volatility. The Republic of Vanuatu has resolved to improve its energy security and contribute to
combatting climate change based on a balanced portfolio of indigenous renewable energy resources.
The country’s Renewables Readiness Assessment (RRA), undertaken in co-operation with the International
Renewable Energy Agency (IRENA), has produced a holistic evaluation of the sector and identified key actions
to overcome barriers to increased renewable energy deployment. This is a country-led process, with IRENA
providing technical support and expertise to facilitate consultations among different national stakeholders.
Since 2011, more than 20 countries in Africa, the Middle East, Latin America and the Caribbean, and the AsiaPacific region have undertaken the RRA process, which generates knowledge of best practices and supports
international co-operation towards the accelerated deployment of renewable energy technologies. Vanuatu,
a strong and consistent supporter of IRENA’s mission, is one of those countries.
Vanuatu has demonstrated its commitment to the transition to an independent, sustainable energy future.
The National Energy Road Map laid out in 2013 charts the country’s path to obtaining electricity access for all
citizens through major increases in renewable energy use. Implementation will depend on establishing clear
roles for the Vanuatu Department of Energy, the Utility Regulatory Agency and other institutions, as well as
effective co-ordination with development partners.
Integrating renewables into Vanuatu’s existing power infrastructure requires a comprehensive grid assessment
study and the adoption of standards to ensure grid stability under specific local conditions. The expansion
of off-grid applications, meanwhile, calls for enhanced capacity and additional standards, with a focus on
scaling up solar home systems and solar-based mini-grids in rural areas.
With the continued decline in technology costs and an abundance of renewable energy resources in Vanuatu,
the economic case for building a sustainable energy system based on indigenous sources is strong.
IRENA wishes to thank the Honourable James Bule and his team at the Ministry for Climate Change for the
warm welcome they extended and for the commitment they exhibited in conducting this study. Our shared
view of a better energy future will continue to underscore our mission to facilitate further RRAs in the Pacific
and beyond.
I sincerely hope that the outcomes of the consultations will strengthen Vanuatu’s pursuit of accelerated
renewable energy deployment. IRENA stands ready to provide continuing support in implementing the
actions identified, as the country lays the foundations for long-term energy sustainability.
Adnan Z. Amin
Director-General, IRENA
Renewables Readiness Assessment
V
VI Vanuatu
Ghana
TABLE OF CONTENTS
LIST OF FIGURES
LIST OF TABLES
LIST OF BOXES
ABBREVIATIONS
EXECUTIVE SUMMARY
VIII
VIII
VIII
IX
XI
I.INTRODUCTION
1.1 Country profile
1.2 Energy for development
1.3 Renewables Readiness Assessment
process in Vanuatu
1
1
2
II. OVERVIEW OF THE ENERGY SECTOR
2.1 Energy supply and demand
2.2 Electricity supply through grids
2.3 Renewable electricity tariffs, feed-in
tariffs and net-metering
2.4 Access to electricity
2.5 Renewable energy potential
2.6 Institutional framework
2.7 Energy policies
2.8 Human capacity
5
5
6
2
7
9
11
15
16
17
III. SCALING UP RENEWABLE ENERGY:
RECOMMENDATIONS AND CHALLENGES
3.1 Effective implementation of NERM: policy review
and development-partner coordination
3.2 Grid-connected renewables
3.3 Off-grid renewables
19
20
22
IV. THE WAY FORWARD: STRATEGIES AND ACTION
25
V.REFERENCES
33
19
Renewables Readiness Assessment VII
LIST OF FIGURES
Figure 1 Map of Vanuatu 01
Figure 2 Energy supply and demand in 2011 in tonnes of oil equivalent05
Figure 3 Proposed geothermal production area on Efate in Vanuatu11
Figure 4 Port Vila load curve for weekdays and Sundays (2013)14
LIST OF TABLES
Table 1 Utility capacity by energy source (September 2013)07
Table 2 Utility tariff structure08
Table 3 Overview of recommended action emerging from the RRA25
LIST OF BOXES
Box 1 Vanuatu Electricity for Rural Development10
VIII Vanuatu
Ghana
ABBREVIATIONS
ADB
Asian Development Bank
CNO Coconut oil
DoE
Department of Energy
EUEuropean Union
FIT/s
Feed-in-tariff
GwhGigawatt hours
GDP
Gross Domestic Product
IPP
Independent Power Producer
kmkilometre
kWkilowatt
kWpkilowatt-peak
kVAkilovolt-amp
MWmegawatt
NERM
National Energy Road Map
O&M
Operation and Maintenance
PPA
Power Purchase Agreement
PVPhotovoltaic
RRA
Renewables Readiness Assessment
SEIAPI Sustainable Energy Industries Association of the Pacific Islands
SHS
Solar Home System
UNELCO
Union Electrique du Vanuatu Limited
URA
Utilities Regulatory Authority
VANREPA Vanuatu Renewable Energy and Power Association
VERD
Vanuatu Energy for Rural Development
VUI
Vanuatu Utilities and Infrastructure
Wpwatt-peak
USD 1 = VUV 108.64 (Vatu) on 12 June 2015
Renewables Readiness Assessment IX
Solar Water Heaters, Grand Hotel Port Vila
Photo: H. Wade
X
Vanuatu
EXECUTIVE SUMMARY
Located in the western Pacific Ocean, Vanuatu
is an archipelago of 80 islands supporting a
population of about 234,000. The majority of
these inhabitants live in rural areas and rely on
subsistence agriculture and barter to meet most
of its daily needs. Economic growth has been
driven by foreign investment in tourism and land
development. Economic growth is above average
compared to other independent Pacific nations, but
is largely urban with little effect on rural incomes.
The primary energy supply is dominated by
biomass (mainly for rural cooking) and petroleum
(urban energy and transport). Modern energy
carriers are used largely in urban areas. The
Vanuatu Department of Energy (DoE) estimates
that 80% of urban and 17% of rural households
have electricity access. Two private utilities, Union
Electrique du Vanuatu (UNELCO) and Vanuatu
Utilities and Infrastructure (VUI), serve four
concession areas through grids. The utilities are
regulated by an independent government agency,
the Utilities Regulatory Authority (URA).
Vanuatu has drawn up a National Energy Road
Map (NERM) which acts as the energy policy.
NERM charts a direct path to major increases in the
use of renewable energy and access to electricity
by all citizens. The 65% renewables target for
2020 is ambitious but achievable. Renewable
energy accounts for about 43% of total electricity
generation at present with sources including
hydropower, coconut oil (CNO), wind and solar.
Access to electricity for rural households is a major
priority of NERM since most of these (83%) remain
without electricity in 2013. Meeting the NERM
energy access goal would create a huge market
for renewable energy technologies since they
are the most cost-effective solution for off-grid
electrification in rural and remote areas. However, a
historic inability to keep off-grid renewable energy
projects going both financially and technically has
prompted concerns that they cannot be sustained
in the long term.
Vanuatu has an excellent solar resource. It is available
throughout the populated areas of the country and
could be used to generate electricity to offset the
cost of imported fuels. Several solar photovoltaic
(PV) projects with a total capacity of more than
2.6
megawatt (MW) are under consideration.
Interest from independent power producers
1
(IPPs) in solar PV electricity generation has been
increasing. The URA has established regulations for
connecting private solar installations to the grid.
Moreover, a 4 MW geothermal plant is expected to
go on stream before 2020, and some hydropower
may also be added. The URA is also in the process
of developing Power Purchase Agreement (PPA)
formats for the private generation of power from
renewable energy to feed into the grid. To fulfil
the aims in NERM, it is necessary to establish and
enforce technical standards for grid-connected
systems and regulatory capacity for small scale
distributed generation systems.
To meet the NERM targets, the utilities, government
and development partners will probably need
private sector support to install renewable
electricity generation at the scale needed within
the required time. For this reason, much of the
discussion during the Renewables Readiness
Assessment (RRA) focused on actions to
encourage private investment in renewable energy.
Recommended actions
Actions needed to reach the NERM targets were
divided three categories during stakeholder
interviews and group discussions, as described
below.
Institutions and policy
• Review enabling legislation and other
documents relating to URA and DoE
responsibilities and tasks, and align them
with NERM. Propose changes and additions to
legislation as required to provide the institutional
authority and responsibility needed to meet the
NERM targets.
• Support URA and DoE roles in NERM. Prepare
an operating plan that includes human, physical
and financial resources needed by both DoE
and URA to support NERM implementation in
2014-2020. Seek that support from government
and/or development partners.
• Facilitate coordination among development
partners. DoE and URA should prepare project
documents designed to carry out the action
needed to achieve NERM goals, and circulate
them among development partners. This will
help retain development partner focus on
NERM goals.
2009 data
Renewables Readiness Assessment XI
Grid-connected renewables
• Prepare dynamic models of the Vanuatu grids.
In order to assess the ability of the four Vanuatu
grids to accept inputs from highly variable solar
and wind generators, each one will need to be
modelled. This will allow the utilities to predict
the effect of rapidly fluctuating input changes
at various points on the grid, and will require
external expertise and development partner
funding.
• Establish nationwide standards for gridconnected solar and wind systems. These
types of standards help ensure installations
are of good enough quality and meet the
stringent safety and technical requirements
essential to the healthy growth of the sector.
Furthermore, national standards will help
ensure all installations are compatible with
each other. This will prevent the problems from
unfavourable interactions between private solar
generators on the same grid.
• Training and capacity building. Local
contractors will need to be trained to ensure
they understand and can competently apply
the standards and guidelines for the renewable
energy installations they construct and
maintain. Capacity for inspection, monitoring
and compliance will also be necessary to
confirm that installations continue to meet
relevant standards and can be safely connected
to the grid. For long-term capacity building,
it will be necessary to work with local training
facilities to provide training appropriate to
the renewable technologies utilised. These
include Vanuatu National Training Council,
Vanuatu Institute of Technology, Vanuatu Rural
Development and Training Centre Association
and other institutions.
• Finance for the private sector installation of
grid-connected renewables. The Government
of Vanuatu should consider working with
multilateral development banks to obtain low
interest loan funds providing concessionary
rates to commercial entities with significant
daytime loads. These include, for instance,
supermarkets and tourist facilities intending
to install grid-connected solar to offset those
loads. The Government of Vanuatu should also
consider using development partner funds
to finance grid-connected solar on its own
property as a cost reduction measure. This
action has already begun since the United
Arab Emirates has funded grid-connected solar
projects to be installed at government offices
and the parliament buildings.
XII Vanuatu
Off-grid renewables
• Design an institutional approach for
sustaining off-grid electrification using
Solar Home Systems (SHS) in homes and
public buildings. The DoE should review the
institutional approaches used in Fiji, Tonga,
the Solomon Islands and Kiribati to keep rural
SHS installations continuously running. It
should work with them to design a structure
appropriate to Vanuatu. More than 10,000 SHS
installations have sufficed to provide users
with multiple lights, radios, mobile phone and
portable light charging. These range from
100 Watt-peak (Wp) in Kiribati to 200 Wp
installations in the Marshall Islands. The level
of service they provide is comparable to that
usually accessed by households connected
to rural grid extensions. It therefore counts as
full rural electrification. The more successful Pacific island approaches
use a combination of external and local support
and include systems that collect reasonable fees
in cash form. Alternatively, as in the Solomon
Islands, payment is accepted in the form of
agricultural produce or handicrafts with a known
value. Technical support may be provided by a
contractor, as in Fiji, or a locally trained person
supported by the DoE, as in Tonga. Another
option is to form an organisation specifically to
support rural solar installations, as in Kiribati and
the Solomon Islands. The experience of these
countries has been shaped over more than two
decades of trial and error. It should inform the
design of the most fitting institutional structure
for SHS and mini-/micro-grid rural solar
implementation in Vanuatu.
• Develop standard designs for SHS and solar
mini-grids. For long-term, reliable service, offgrid SHS designs need to meet the typical load
requirements of rural households and provide
sustainable operation in harsh environments.
Designs should be modular so that installations
of different sizes can be produced using the
same components — particularly batteries. This
will ensure that end-users receive the size of
installation that meets their needs and ability to
pay for maintenance.
The generation cost of solar mini-grids has
fallen below that of rural diesel, so these
should be selected by villages and larger rural
public facilities like hospitals and schools.
Sustainable operation and maintenance (O&M)
is an important consideration with mini-/microgrids, so the DoE should prepare a standard,
modular design with suppliers and external
experts with knowledge of Vanuatu. The design
would consist of a standard set of panels,
batteries and inverters for stand-alone power
production. For additional power and overall
capacity, multiple modules can be connected
together. This modular approach enables
standardised maintenance and spare parts
storage and greatly simplifies construction.
Development partners and private investors
should be required to meet these standards.
A standard, modular design of this type was
created by the Ministry of Foreign Affairs and
Trade of New Zealand. It has been used to
convert diesel mini-grids to solar in Tokelau,
the Cook Islands and Tuvalu.
• Build capacity for sustainable use of offgrid solar technology. Using local education
institutions, develop the necessary courses to
provide installers and maintenance technicians
with long-term training options, focusing on
off-grid SHS and solar mini-grid installations.
Due to the use of battery storage and low
voltage direct current inputs, this training will
be substantially different from that required
for grid-connected solar generation.
• Increase access to electricity in rural areas.
It is recommended that Vanuatu develop
a specific strategy in association with
development partners: for rapidly expanding
rural electricity provision to households and
villages using renewable energy; review past
programmes and explain their problems and
failures; propose strategies for expanding rural
electrification in a programmed and rational
manner in order to optimise installation and
maintenance resources; and determine the
criteria for selecting the electrification type
best fitted to the targeted areas. Options for
village electrification include a solar minigrid or SHS on individual homes or financing
a grid extension to the area. Alternatively
the distribution of pico-solar type devices
could be arranged, or various implementation
methodologies combined.
• Conduct an off-grid market study. Work
with tourism authorities and the private
sector to assess the probable market for
solar mini-grids for new tourism installations
and to replace existing diesel generation. If
demand is sufficient, set up a programme to
promote solar mini-grids to replace existing
diesel generation and to install them in
newly-constructed facilities by developing
appropriate attractive finance.
The following consolidated eight core activities
are recommended to create the foundations for
renewable energy in Vanuatu:
1. Ensure the policies, regulations and legislation
needed to support NERM are in place. Legal,
administrative and regulatory barriers must
not obstruct the fulfilment of NERM targets.
Legislation on the authority and responsibilities
of URA and DoE need to be reviewed in
particular. If necessary, their authority and
responsibilities need to be updated so that
NERM targets are met.
2. Create dynamic models of the four concession
grids to determine how well they accept solar
or wind connection at various grid entry
points. Utility grids are unsure how solar input
will affect grid operation and therefore prefer
to ban solar, rather than accept the risk. This is
a major barrier against opening the utility grids
to private solar inputs. By preparing a dynamic
model of each of the grids, the Vanuatu
utilities can predict the effect of inserting solar
or wind power into the grid from any feeder.
This will allow a wide range of private solar
inputs into their grid without fear of system
damage.
3. Implement and enforce national standards for
on-grid solar installations. Enforcing standards
for on-grid solar installations greatly increases
both consumer and utility confidence in the
technology, simplifies training requirements and
introduces routine maintenance. The utilities in
Vanuatu already use Australian standards for
their operations. In association with the Pacific
Power Association, the Sustainable Energy
Industries Association of the Pacific Islands
(SEIAPI) has proposed regional guidelines for
solar on-grid generators. These accept that
each island country is in a different situation,
and ensure that local conditions, both technical
and environmental, are taken into consideration
in national standards and guidelines.
4. Create an institutional approach for off-grid
SHS and mini-grid system O&M based both
on prior experience in other Pacific islands
and failed projects in Vanuatu. People in
remote rural areas have limited cash, and
these circumstances require a special type of
institutional system to support rural energy
systems maintenance. This must be able to
provide the necessary services in these areas
to meet the needs of the rural households in a
sustainable manner.
Renewables Readiness Assessment XIII
5. Prepare a standard, modular design for SHS and
solar mini-grids adaptable to a wide range of
requirements. A standard modular design for low
voltage direct current off-grid solar installations
simplifies training requirements and minimises
spare parts stocks. At the same time, maintenance
becomes feasible for rural technicians. Standard
designs proven in the field provide investors with
the confidence they will be an economical and
reliable source of off-grid power.
6. Prepare a standard, modular design for solar minigrids adaptable to a wide range of requirements.
This standard design would provide higher power,
three-phase alternating current installations for
off-grid use employing multiples of a standard
module. A standard modular design can result
in increased system reliability, lowest cost O&M,
simplified training programmes and minimal
requirements for spare parts storage.
Solar Photovoltaic/Shutterstock
XIV Vanuatu
7. Build capacity for on-grid and off-grid
renewable energy technologies. There is little
chance of sustainable operation of renewable
energy systems without the local capacity
to install and maintain them. Both urban and
rural technical capacity will be needed. Local
educational institutions with an understanding
of the educational needs of the local
students will be best suited to providing the
necessary capacity building if properly
supported.
8. Facilitate financing to increase private
investment in renewable energy and
energy efficiency. Once the technical and
institutional aspects private investment in
renewables are addressed, access to finance
will be necessary to support the heavy
front-loaded investment needed to install the
equipment.
I. INTRODUCTION
1.1 COUNTRY PROFILE
Vanuatu’s 80 islands are mostly volcanic and spread over 710,000 square kilometres
(km2) of the western Pacific Ocean. Of these islands, 65 have permanent populations.
The country’s 2009 census showed Vanuatu had a total population of around
234,000, or 47,373 households, inhabiting a total land area of 12,190 km2. About
75% of the population live in rural areas, with around 19% in the capital city of Port
Vila. The remaining 6% are situated in the smaller urban area of Luganville. With an
annual population growth of about 2.8%, the 2014 population is estimated at around
269,000, with the urban growth rate around 1% higher than that of rural areas.
Figure 1: Map of Vanuatu
Source: Google Maps
The boundaries and names shown on this map do not imply any official endorsement or acceptance
by IRENA.
With a gross domestic product (GDP) of approximately USD 821 million in 2013,
the average per capita GDP in Vanuatu has reached USD 3,086. This represents a
year-on-year real GDP growth rate of 2.8%.2 GDP is expected to have risen by 3.5%
in 2014 compared to 2013 indicating upward economic growth after a three-year
period of low growth. Agriculture, fishing and tourism are the major contributors
to GDP, and tourism is the most likely to be affected by energy policy.
In 2013, the value of imported goods exceeded the value of exports by a factor of
more than 5 to 1, with petroleum constituting a substantial proportion of imports.
Exports consist largely of copra, beef, timber, kava and coconut oil (CNO). Income
from tourism has recently grown and has steadily reduced the current accounts
gap between imports and exports.
Economic growth has been driven by increased foreign investment in tourism and
land development, but the growth is urban and has little effect on rural incomes.
Only around 10% of GDP comes from rural areas. Most rural residents have
relatively poor access to cash and depend on subsistence agriculture and barter to
meet many of their daily needs. Around 75% of Ni-Vanuatu3 inhabitants live in rural
areas, and many have less than a dollar a day in cash income.
2
According to the latest published figures from the Australian Department of Foreign Affairs.
Ni-Vanuatu refers to all Melanesian ethnicities originating in Vanuatu. It also refers, more generally, to nationals and citizens of Vanuatu, whatever their ethnicity.
3
Renewables Readiness Assessment
1
1.2 ENERGY FOR DEVELOPMENT
To continue Vanuatu’s socio-economic development,
the Government of Vanuatu has prioritised the
increased use of affordable, high quality forms of
renewable energy. This is reflected in the strategic
vision embodied in National Energy Road Map
(NERM), which has been created and adopted as the
guiding document for developing the energy sector
in Vanuatu. By creating NERM, the Government
of Vanuatu has put a high priority on energy
development. It is making efforts to provide the rural
population with increased electricity access as well as
making electricity more affordable through greater
use of indigenous energy resources.
Most commercial and industrial businesses are in
urban areas, but the high electricity tariffs there have
inevitably had an adverse impact on their operations.
One NERM goal is to at least stabilise the cost of
electricity generation by investing in renewable
energy systems that offset diesel fuel use. Where
possible, they want to effect a reduction in tariffs by
adding renewable energy generation that is cheaper
than diesel. Solar, wind and hydropower installations
generating at a lower cost than diesel are already
in place. In addition, geothermal energy under
development may also prove to be less costly than
diesel generation.
Outside the utility concession areas, only 17% of rural
households have access to electricity. Large scale
implementation of cost-effective, pico-solar lighting
schemes is the first step to getting rural electrification
up and running. Affordable installations of this type
can provide basic access to electricity for quality
lighting and mobile phone charging and are greatly
in demand from the rural population. Larger solar
installations are to be installed in schools, health
centres and other government facilities that need
more electrical service than the pico-solar systems
can provide. Technology is not the key challenge
affecting rural electrification. This lies rather in
securing the funds and human capacity needed to
sustain the installations in the long term.
With renewable energy system costs falling
worldwide, the islands are experiencing new
opportunities for energy independence. The first
step towards further developing renewable energy in
Vanuatu is to understand the gaps and identify the
action that should be taken to narrow them.
1.3 RENEWABLES READINESS
ASSESSMENT PROCESS IN VANUATU
The Renewables Readiness Assessment (RRA)
methodology is used to conduct a comprehensive
2
Vanuatu
assessment of a country’s readiness in terms of
renewable energy development. The resulting
consultations produce a portfolio of actions that are
needed to address key issues.
The background to the Vanuatu RRA process is the
Government of Vanuatu’s endorsement of NERM.
This set a policy target to achieve 65% of Vanuatu’s
electricity use through renewable energy by 2020.
The RRA provides guidance for formulating specific
and practical actions in selected priority areas that
can enable Vanuatu to increase the use of modern
forms of renewable energy. The RRA results are based
on a comprehensive assessment of the current status
of the Vanuatu energy structure with a particular
focus on renewables. The outputs come primarily
from a multi-stakeholder consultation that brought
together user stakeholders and representatives from
the energy providers. They discussed the issues
that need to be addressed, and outlined the actions
needed to move Vanuatu towards the targets set out
in NERM.
The RRA has the following aims:
• Conduct a comprehensive review of renewable
energy development at present in Vanuatu to
improve understanding of the sector.
• Identify and analyse the key issues associated
with and arising from the development and
utilisation of renewable energy resources.
• Present the opportunities for scaling
up renewable energy development and
deployment, discuss the specific issues to
be addressed, and prepare specific policy
recommendations.
• Produce a portfolio of actionable initiatives
developed
jointly
by
participating
stakeholders. This can capitalise on the
renewable energy development opportunities
revealed by examining the renewable energy
subsectors and by extensive discussions with
multiple stakeholders.
The RRA process was led by the DoE at the Vanuatu
Ministry of Climate Change Adaptation and Natural
Disasters, in close collaboration with an IRENA
RRA team. An issue paper was written to identify
in advance the key barriers to scaling up renewable
energy applications in Vanuatu. It also served as a
key background document for the discussions that
followed.
To facilitate close cooperation and coordination
between the Government of Vanuatu and
development partner organisations, the actions
identified are to suit both development partner
support structures and those in Vanuatu. A
workshop was organised in Port Vila to bring
together all the principal stakeholders in Vanuatu’s
renewable energy development. It charted the
optimal path and identified projects related to
renewable energy that can help reach NERM goals
and targets.
Interviews and follow-up discussions took place.
They yielded in-depth understanding of the matters
discussed at the workshop, different perspectives,
and stakeholder advice and thoughts on how to
tackle them. This is an important complementary
function in the methodology.
The key findings from the RRA study have indicated
that Vanuatu will be able to reach the key 2013–2020
renewable energy targets in NERM. This depends
on effective measures to improve the enabling
environment for renewable energy development
and sufficient support from development partners.
Origin LPG depot, Port Vila
Photo: H. Wade
Renewables Readiness Assessment
3
Hotel Solar Panels/Shutterstock
4
Vanuatu
II. OVERVIEW OF THE
ENERGY SECTOR
The energy infrastructure within the Vanuatu archipelago varies significantly. The
government has established concession areas for private utilities to distribute
electricity through power grids on parts of the islands of Efate, Tanna, Malekua and
Espiritu Santo. The grids provide electricity services mostly through generation
with diesel gensets and also through hydropower, wind and solar power. The
combined distribution network covers 33% of total households in Vanuatu.
Outside the concession areas, electricity access is minimal and is on an individual
generation basis, mostly through small diesel or petrol generators with some use
of renewable energy - mostly solar.
As a result of the declining cost of solar and wind energy technologies, applications
of solar and wind power systems have recently been increasing in both urban and
rural areas. To keep abreast of the rapid development of the energy sector, DoE
capacity has been reinforced, and the Vanuatu NERM was developed and adopted
by the government. This is the first guiding document of this kind in Vanuatu. While
this is a major step forward, the challenge of effectively implementing NERM remains.
2.1 ENERGY SUPPLY AND DEMAND
Energy demand in Vanuatu is met primarily by biomass and oil products, as shown
in figure 2. Biomass is a major energy source, as three quarters of the population still
live in rural areas where it is the dominant energy source for cooking. Petroleum is a
major energy source too since transport, urban cooking and electricity generation
are fuelled mainly by petrol, liquefied petroleum gas and diesel fuel.
Figure 2: Energy supply and demand in 2011 in tonnes of oil equivalent*
* toe
Based on data from King and Mackay, 2012.
Vanuatu has no known fossil fuel resources. All petroleum products consumed
have to be purchased from international markets and shipped to Vanuatu. The
Pacific Petroleum Company is the sole petroleum fuel importer in Vanuatu. This
company provides a portfolio of oil products, 63% of which are diesel, around
Renewables Readiness Assessment
5
15% jet fuel and petrol each, and the remaining
7% kerosene and avgas (aviation gasoline). In 2011,
petroleum products4 accounted for nearly half the
total primary energy supply, while biomass for
cooking provided the other half. Modern renewable
energy sources, such as hydropower, wind, solar
and biofuels, provide the remaining 1,000 toe
(see figure 2). There is great potential for a higher
renewable energy share by adding solar, wind,
geothermal, biofuels and hydropower facilities.
some villages, more than 90% of electricity is
generated and delivered by Union Electrique du
Vanuatu Limited (UNELCO) and Vanuatu Utilities
and Infrastructure (VUI). UNELCO is a subsidiary
of GDF Suez in France. It serves the entire island
of Efate (which includes Port Vila, the largest city
in Vanuatu), and the urban areas of Tanna and
Malekua. VUI is a subsidiary of the Pernix Group
based in US, and serves Luganville, the second
largest city.
If biomass is taken into account, the residential
sector is the largest energy user. This indicates that
a large number of households still rely on traditional
biomass for cooking and crop drying, while their
use of modern energy forms of bioenergy is still
limited. In contrast, the direct use of fossil fuels
accounted for only 4% of total household energy
consumption in 2011.
UNELCO and VUI are currently serving nearly
14,000 customers - more than one quarter of
the total population. As shown in table 1, the
combined utilities had a total generation capacity
of 34.79
megawatts (MW) and generated
70
gigawatt-hours (GWh) in 2013. Renewable
energy sources accounted for 43.6%, including
CNO at 21.8%, wind at 12.8%, hydropower at 8.7%
and solar at 0.3%. It was estimated that electricity
generated by renewable energy sources saved
about 11 million litres of diesel imports.
The transport sector remains the largest consumer
of petroleum products, accounting for 55% of
total petroleum products imported in 2011. When
combined with the consumption of diesel fuel for
power generation, the residential and transport
sectors accounted for 84% of total oil imports for
the same year.
The consumption of petroleum products by
industrial, commercial and public services
accounted for less than 10% of total oil imports.
This suggests that the industrial and commercial
sectors may be still underdeveloped in Vanuatu.
Furthermore, electric power may be the preferred
form of energy used by these sectors.
According to the 2011 data, the combined primary
energy used by agriculture, forestry and fishing
was modest - less than that of either the industrial,
commercial or public service sectors.
2.2 ELECTRICITY SUPPLY
THROUGH GRIDS
Electric power is supplied either through an urban
grid or by off-grid power systems. Although
there are also small private and semi-private
electricity producers at tourist facilities, and in
4
6
About 42,600 toe
Vanuatu
Except for the 600 kilowatts (kW) Sarakata River
hydropower station commissioned in 1995 (Utilities
Regulatory Authority (URA), 2010), all the other
grid-connected renewable energy generation
facilities were built after the fuel price spike of
2008.
As with most Pacific islands, reducing energy
import costs has been a key driver for the quick
adoption of renewable energy sources as an
alternative to imported fuels. Solar photovoltaic
(PV) system and wind turbine costs have declined
rapidly over the past few years. This means solar
and wind power have become attractive options
for stabilising, if not reducing, the overall energy
generation costs throughout the Pacific islands.
Vanuatu diesel fuel power generation has
fallen from 90% in 2009 to 56.4%. This is due to
increased hydropower capacity in Luganville, more
CNO replacing diesel fuel, and a 3 MW installation
of wind capacity by UNELCO near Port Vila. At
present, as much as 43.6% of electricity is produced
from renewable energy sources. The actual amount
varies from day to day due to the variability of solar
and wind resources.
Table 1: Utility capacity by energy source (September 2013)
EFATE
ESPIRITU
SANTO
MALEKULA
TANNA
Port Vila
power
station
Luganville
power
station
Lakatoro
power
plant
Lennakel
power
station
Number of installed diesel generation sets
10
8
4
4
Diesel capacity (diesel fuel + CNO) (MW)
26.5
0.5
-
Concessionary areas
Generation capacity
Diesel capacity without CNO (MW)
-
2.9
Hydropower (MW)
1.2
Diesel + hydropower capacity (MW)
26.5
Wind (MW)
3.02
On-grid solar installed by the utility (MW)
0.07
Grid-connected solar*(MW)
Total capacity (MW)
0.5
4.1
0.5
0.5
0.04
0.040
0.020
-
4.14
0.52
0.54
29.59
Total (MW)
34.79
Utility generation
Diesel used (million litres)
13.5
0.24
0.2
0.5
MWh** produced
59,529
725
721
9,044
Diesel %
72.60
65.78
95.88
20.36
CNO %
17.73
29.93
0.00
0.09
Hydropower %
0.00
0.00
0.00
79.56
Wind %
9.51
0.00
0.00
0.00
Solar %
0.18
4.30
4.12
0.09
* Government of Vanuatu project
** Megawatt-hours
Sources: URA website (www.ura.gov.vu), UNELCO technical reports, VUI technical reports
2.3 RENEWABLE ELECTRICITY TARIFFS,
FEED-IN TARIFFS AND NET-METERING
The electricity tariff is a combination of a fixed unit
charge related to non-fuel power generation and
delivery costs, and a variable component adjusting
for fluctuating fuel and other costs. As table 2
shows, the tariff for households with low usage is
tiered. The factors ‘P’ and ‘Pc’ represent tariff cost
factors, providing for varying costs and updated as
costs change.
For households on the UNELCO grid with low usage,
the first 60 kilowatt-hours (kWh) per month are
charged VUV 0.34 x P per kWh. Where P is set
at 55.56 (mid 2014), which makes the lowest tier
tariff 18.89
VUV/kWh. This is approximately
0.205
USD/kWh, less than half the typical
cost of a utility based on diesel generation.
For 60-120
kWh usage, the tariff is
VUV 1.21 x P (VUV 67.22 as of May 2014 or
approximately USD 0.73). Finally, residential
customers in this tiered low usage rate who use
over 120 kWh per month are charged the very
high rate of VUV 3.00 x P (VUV 163.86 or around
USD 1.78/ kWh). However, URA has clarified that
the tiered tariff for UNELCO customers alone
is a subsidised rate only available to customers
who normally use less than 120 kWh a month.
An additional restriction only allows a 5 A or
10 A single phase connection. Customers on the
tiered tariff can use more than 120 kWh in any
particular month and must pay the very high
rate of VUV 3 x P for all usage over 120 kWh.
However, if they use more than 120 kWh for
three consecutive months, they are transferred
to the ‘Other Low Voltage Customers’ rate at
a flat rate of VUV 1.21 x P (VUV 67.22 or about
USD 0.73) plus a monthly charge of VUV 5 x P
per subscribed kilovolt-amp (kVA) for all usage.
Renewables Readiness Assessment
7
Table 2: Utility tariff structure*
UNELCO
Customer group
Price/kWh (VUV)
Monthly fixed charge
Small domestic customers
Up to 60 kWh = 0.34 x P
61 - 120 kWh = 1.21 x P
Over 120 kWh = 3.00 x P
0
Other LV* customers
1.21 x P
5  x P per subscribed kVA
LV business licence holders
0
0
0.87 x P
20 x P per subscribed kVA
Sports fields
1.00 x P
None
Public lighting
0.54 x P
None
High voltage users
0.70 x P
25 x P per subscribed kVA
VUI
Interim LV
Up to 60 kWh = 0.38 x Pc
61-120 kWh = 0.97 x Pc
121-180kWh = 1.80 x Pc
Over 180kWh = 1.10 x Pc
None
Sports fields
1.00 x Pc
None
Public lighting
0.54 x Pc
None
High voltage users
0.70 x Pc
25 x Pc per subscribed kVA
*May 2014 – P = 55.56
*Low voltage
Source: URA
URA states there are around 5,300 domestic
customers on the tiered tariff, and around
4,200 domestic customers on the ‘Other Low
Voltage Customers’ tariff. Thus two different tariffs
for domestic customers are set according to usage.
The government provides no external subsidy, so
the utility must recover all its costs through its
overall tariff structure.
Commercial and industrial customers also have
tariffs adjusted as costs change through a factor
(P), as shown in table 2. However, this is calculated
in a simple way, i.e. per kWh price plus a charge
based on the power demand by the user.
VUI serves the Espiritu Santo concession area
and has a lower tariff than UNELCO due to a
high percentage of lower cost generation from
hydropower. UNELCO tariffs are adjusted monthly,
but VUI has a fixed tariff valid for 12 months.
URA published rules in mid-2014 for net-metering
and feed-in tariffs (FITs) for customers wishing
8
Vanuatu
to install their own solar generators and connect
them to the grid. This is discussed in detail in section
3.2. Small residential customers will receive credits
for any solar generation not used by the home
that is fed into the grid. The credits can be used to
offset the cost of any grid power used in the home.
They are carried forward to the end of each billing
period, at which point the credits will be reset to
zero. This approach allows households owning
solar to feed electricity into the grid during the
daytime when household loads are low. In turn,
households are permitted to take the same amount
from the grid later without charge. By resetting
the credit to zero at the end of each billing period,
residential customers are discouraged from
installing solar systems that will generate more
than their home use.
Commercial
and
industrial
customers
will
be
allowed
to
connect
private
solar generators to the grid through a separate meter.
They will be paid a FIT of 18.89 VUV/kWh (around
USD 0.21), which is used to offset their monthly bill.
2.4 ACCESS TO ELECTRICITY
It is estimated that 33% of all Vanuatu households
have access to electricity, and only around 17% in rural
areas. Thus, about 67% of all households do not have
access to electricity. Many of those are in areas with
grid concessions.
Access in concession areas
UNELCO and VUI are working towards implementing
an ‘Improved Access to Electricity’ project. This
is aimed at households lacking access in the grid
concession areas or immediately adjacent to areas
suitable for grid extension. This project is funded by
the Global Partnership on Output-Based Aid through
the World Bank. It allows consumers on a low income
still without a connection to receive assistance to gain
electricity access through grid extensions.
Access outside the concession areas
Most of the electricity outside the concession areas
is produced by small diesel generators operated by
communities or government stations. Diesel-powered
mini-/micro-grids are typically used by tourist facilities.
Although a number of solar electrification projects
have been set up in rural areas, keeping these going
in the long term remains a real challenge. Few systems
survive more than five years in NERM, the government
objective is to provide 100% of rural households with
electricity access by 2020 through individual home
systems and basic power products. To meet that target,
a significant amount of support from the development
community is required. The cancellation of the large
Vanuatu Electricity for Rural Development (VERD)
programme funded by Australia needs to be filled by
other development partners if Vanuatu is to achieve
its target access to electricity. More details about the
VERD programme can be found in box 1.
The VERD programme did not get beyond the
early planning stages. However, its concept and
key components have provided valuable inputs
for understanding what has to be done to achieve
the electricity access target. Building on the VERD
programme, the World Bank has stepped in to close this
gap. It is implementing some of the major components
that had been included in the programme.
Another program with a focus on rural areas and
access to electricity for poverty population is the
United Nations National Appropriate Mitigation Action
(NAMA). Under the support from the United Nations
Development Programme, developing a detailed
NAMA document is underway. The document will
provide design of programs that will increase access
to electricity for low-income households in rural
communities. When completed in mid-2015, the
NAMA is expected to add impetus for providing access
to electricity in rural areas.
Off-grid systems powered fully or partly by solar
PV can undoubtedly provide the most costeffective solution for remote rural electrification
in areas distant from the grid with low per capita
demand. The cost of a low-capacity power supply
solution for off-grid households, known as picosolar PV systems, is about USD 20-100. This
depends on the type of product. These systems
typically provide one portable LED light and often
include a connection for phone charging.
Some critics argue against the classification of the
pico-PV system as rural electrification because of
the extremely limited energy services it can provide.
However, it is in great demand by villagers, as they
see it as an improvement to their quality of life and
a cost-saving solution compared to kerosene night
lighting. Using direct sales for cash from retailers to
end-users simplifies the business model.
The purchaser is responsible for the installation,
proper operation and entire maintenance of the
pico-solar units. Solar panels and LED light are
robust, so the battery is the only component likely
to incur a significant maintenance cost. However,
these units have only been in place in large numbers
over the past two or three years, so it is too early to
tell whether units can be sustained after batteries
are exhausted and need replacement.
Over the past 20 years, several projects for rural
electrification have provided Solar Home Systems
(SHS). The SHS has had the capacity to deliver a
higher level of energy services than pico-solar but at
a cost of USD 800–1,000. The 1999-2002 PREFACE
project funded jointly by France and Australia is one
example. This focused on rural health centre and
school electrification, and included staff housing
at those facilities. It provided installatwions of
150 watt‑peak (Wp) each for 20 schools and health
centres, and systems of 75 Wp each on 40 houses in
Torba, a remote province in Vanuatu.
The main challenge has not been installation but
sustainable Operation and Maintenance (O&M) of
renewable energy systems. A study funded by the
Asian Development Bank (ADB) entitled ‘Access to
Rural Energy’ is currently considering ways to avert
O&M breakdown in off-grid installations. This study will
prompt a programme aimed at increasing rural
electrification through hydropower for on-grid
generation and grid extensions to households and
businesses lacking electricity across Vanuatu. It focuses on
three areas: (a) improving the overall plan for distribution
network extensions (b) conducting feasibility studies to
determine the practicality of expanded low cost electricity
generation using hydropower (c) increasing the supply of
affordable, grid-connected electricity to households in
targeted provincial centres.
Renewables Readiness Assessment
9
Box 1. Vanuatu Electricity for Rural Development
‘Vanuatu Electricity for Rural Development’ (VERD) was meant to address the challenge of low
access to electricity in rural households (17%), health centres (17%) and schools (42%). It was
funded by AusAID (Final Programme Design Document - December 2011).
VERD was designed as a USD 18.6 million programme lasting six years. It aimed to strengthen
government capacity for planning and supervision, sustainably manage escalating consumer
demand, and establish an enabling environment for a robust private sector engagement to meet
that demand. Its six components are outlined below.
1. Funding mechanisms developed, approved and operational: (i) the Rural Lighting Subsidy
Scheme (up to AUS 2.78 million with high quality solar PV lighting to 80% or more of
households); (ii) the Public Institution Electrification Scheme (up to AUS 5 million for basic
electrification of at least 90% of rural schools and health centres).
2. Vendor accreditation: accreditation of Rural Lighting Subsidy Scheme vendors and the larger
Public Institution Electrification Scheme electrical system developers.
3. Consumer protection standards: participatory establishment and management of technical
and quality standards for equipment and services.
4. Skills development: enhancement of core skills through local and national partnerships.
5. Raising awareness: promotion and responsible use of campaigns for public, civil and private
users of off-grid electricity systems.
6. Institutional development: energy section vision, institutional roles, staffing and resourcing
agreed and in place.
A VERD team was to be established within the energy section of the Ministry of Lands and Natural
Resources. It was to use predominantly national staff supplemented by two full-time advisers
and short-term technical advisers as needed. After six years, the Government of Vanuatu would
have assumed full responsibility for key functions.
The VERD programme was expected to start in 2012, but the Government of Vanuatu was unable
to provide all the agreed inputs (mainly the approval and introduction of local energy staffing
positions). In 2013, AusAid, which had recently moved to the Australian Department of Foreign
Affairs and Trade, cancelled VERD. In late 2013, the Government of Vanuatu upgraded the
energy section to an energy department within a new Ministry of Climate Change. It advertised
for new staff to fill the positions recommended by AusAID, but it was too late to salvage the
VERD programme. The World Bank has worked with the Government of Vanuatu to reconsider,
prioritise and locate funding support for the elements of the VERD initiative lost when the
programme was cancelled. Since then, VERD has been renamed VERP (Vanuatu Electricity for
Rural Program) and is moving ahead.
10 Vanuatu
2.5 RENEWABLE ENERGY POTENTIAL
Geothermal
Geothermal energy works reliably and continuously,
requires limited land area for installation, often
generates electricity more cost-effectively than
diesel plants, and provides base load generation.
In the 1990s, geothermal reconnaissance surveys
carried out on the islands of Efate, Tongoa,
and Vanua Lava revealed the existence of two
active geothermal areas on Efate with useable
temperatures greater than 50°C at Takara and in
the Teuma Graben. In 2010, this finding prompted
the Vanuatu government to request that the World
Bank conduct a study to assess the geothermal
potential of Efate. Figure 3 illustrates the areas with
high geothermal potential.5
Figure 3: Proposed geothermal production area
on Efate in Vanuatu
disproportionate impact. They would affect the PPA
energy cost that Geodynamics could offer in the PPA
or that could at least clarify the viability of the source.
The Environmental and Social Impact Assessment
study began in May 2014, and exploration drilling
was expected to commence before the end of 2014.
Access to land is a significant concern. Through a
National Geothermal Taskforce, the government
is working with land owners to facilitate access to
the needed land for the preliminary work and for
its later use in geothermal resource development.
If the exploratory drilling confirms the resource
could be developed, the first phase would
include constructing a 4 MW net capacity plant.
Construction would start within three years after
the PPA is signed. This could be followed by phase
two with a second 4 MW plant. Initially there
were concerns about proper regulation since
the transmission line and the geothermal plant
would not be in the concession area allocated to
UNELCO. However, UNELCO has now been granted
the concession for the entire island. This avoids
any significant legal problems related to UNELCO
investments that could lie outside the concession
boundary - mainly transmission lines.
Biomass
Around 43,600 toe of fuel wood is burned each
year for cooking and crop drying. Almost all the fuel
wood is used in rural areas, as people in towns cook
mostly with liquefied petroleum gas or kerosene.
However, some wood and charcoal is available in
urban markets for cooking. There is no evidence that
this level of wood use is detrimental to Vanuatu’s
forests. Deforestation in Vanuatu appears to be tied
mainly to agricultural expansion and logging.
Source: www.kuthenergy.com/vanuatu
The boundaries and names shown on this map do not imply
any official endorsement or acceptance by IRENA.
KUTh Energy of Australia (now owned by
Geodynamics, Australia) was granted a 30 year
exclusive production licence to develop geothermal
projects in Efate. In the licence, a minimum tariff of
VUV 23.9 (about USD 0.25) was set for geothermal
power with consumer price index adjustments along
with the carbon credits that accrue to the project.
Power Purchase Agreement (PPA) negotiations
are under way between Geodynamics, URA and
UNELCO, but by mid 2014 no final agreement had
been reached. A major component of the cost of
power is the cost of exploration drilling. International
support for the geothermal project throughout the
initial, higher-risk, exploratory phases would have a
5
Although saw log yields in Vanuatu are
currently around 10,000 cubic metres (m3), the
sustainable harvest level has been estimated at
38,000-60,000 m3 logs per year. It is possible,
therefore, that substantial forest production
waste could be used as feedstock in future as
forest plantations expand and mature. This
could be used for electricity generation both
for powering the forest products facility and
providing electricity to nearby villages.
Biogas
A pre-feasibility study of a new Port Vila municipality
managing an anaerobic sludge sewage treatment
facility was completed in 2012. It was funded by
ADB Project Preparation Technical Assistance. If
this goes forward as planned, the facility may be
running in 2015. Biogas generated by the facility
would be captured and utilised for electricity
Vanuatu: Efate Geothermal Power and Island-Ring Grid Development Framework
Renewables Readiness Assessment
11
generation. Estimates show 275
megawatt-hours
(MWh) of electricity per year can be generated by the
proposed facility. This could be enough to provide the
energy needed by the treatment facility itself.
Biofuel
In the late 1990s and early 2000s, Vanuatu was
the regional leader in the development of CNO for
fuel. This was used both as a direct replacement
for diesel fuel and for blending with diesel fuel
or kerosene for general diesel engine use. Due to
changes in the market for CNO, as well as a biofuels
levy, the cost of the blended fuel rose above
diesel fuel. As a result, the general use of blended
CNO and diesel fuel rapidly declined. UNELCO is
now the primary user of CNO as fuel, consuming
a blend of CNO and diesel at two of its diesel
generation stations (GR 1 tag and GR 2 tag). The
raw materials are from local coconut growers, but
UNELCO does all the processing. It is, therefore,
able to control the quality of the product to meet
the requirements of its engines. The consumption
level is linked primarily to CNO availability, which
depends on market competition and to some
extent on weather conditions. Very little CNO
was consumed in 2010 and 2011 - less than 1% at
one station and around 4% at the other. Recently,
the proportion has been substantially higher. The
utility has also reported using CNO as its principal
form of fuel at its 320 kW Rapides station.
At Port Olry, the European Union (EU) assisted in
the development of a 40 kW generator designed
to use CNO as a fuel and to serve 260 households
(around 1,000 people). To start with, the facility ran
relatively well. However, copra prices have risen,
and a sealed road has been constructed that links
Port Olry to Luganville. After the road was finished,
farmers were able to get a better price for their oil in
Luganville, and supply to the Port Olry installation
became less attractive. The Port Olry project has
had other operational problems too, including
a broken oil press, improper handling of copra
resulting in mould, and copra quality degradation.
Nevertheless, it is still running.
The EU included the following three additional
biofuel generation projects in its First Energy
Facility programme (2007–2013). The Government
of Vanuatu (including provincial governments) was
a partner in each one.
• Torba: villages of Mosine and provincial
capital Sola. The plan was to install two
13 kVA generators in Mosine and two 36 kVA
generators in Sola.
• Penama province: villages of Lolowai, Longana
and provincial capital Saratamata. The plan
12 Vanuatu
was for two 20 kVA generators in Lolowai, two
29 kVA generators in Longana and two 29 kVA
generators in Saratamata.
• Malampa province: villages of Lavalsal
Fotinweiu, Vao, Orap and Wala (Northeast
coast of the island of Malekula). This project
was originally intended for CNO generation
with local distribution. However, UNELCO was
planning a new generation plant in Lakatoro.
As a result, the EU project for Malampa was
modified into the construction of a 26 km grid
extension. Its purpose is to allow UNELCO to
supply electricity from Lakatoro to around
3,500 people in that area.
Unfortunately, the CNO component of the project
has not proceeded on schedule. Due to the
problems at Port Olry, there were concerns that
the Government of Vanuatu would not provide
the necessary co-financing. However, by mid-2014
the Government of Vanuatu component had been
allocated from the remaining assets of the Sarakata
Special Reserve Fund, and the project remains in
the pipeline.
The further development of CNO as a biofuel
replacement for diesel faces a considerable number
of barriers outlined below.
• Copra supply infrastructure: a consistent
supply of copra is required if biofuel is to be a
commercial success. Supply from local farmers
varies both in terms of quantity and quality.
UNELCO set up a company to manage its own
coconut plantation and enter into long-term
supply arrangements with other copra farmers.
The company then sells the manufactured oil
only to UNELCO and is not allowed to export
without UNELCO approval.
• Copra supply outlook: many existing
coconut plantations have a large number of
unproductive, senile trees that need to be
replaced to maintain a consistent, long- term
supply.
• Quality control: oil from export producers is
often of variable quality. Even if manufactured
from good quality copra, it often needs
additional refining to reduce the content of
particulates and contaminants. This is one of
the reasons UNELCO has decided to handle all
its own oil manufacturing and refining.
• Generator technical issues: few engine
manufacturers will allow the use of CNO and
still honour their warranty. Some will allow
CNO blended with diesel fuel up to a certain
percentage, and a few do allow pure CNO as a
fuel without warranty problems. A CNO/diesel
blend of up to 30% has been used by Samoa
utility Electric Power Corporation (EPC) with no
engine damage. Meanwhile, 15% CNO has been
used as a trial by several island utilities without
damage. Thus, it is not a high risk blend in outof-warranty engines, though the CNO must be
properly filtered and refined.
• Copra price: from the late 1990s up until 2010,
cooking using CNO was unfavourable, and its
use in cosmetics was minimal. As a result, the
price tended to be below that of diesel fuel. In
recent years, demand for high quality CNO has
surged. This is due to publicity about its health
benefits in cooking and the use of CNO as a
base for skin creams and cosmetics. There is
concern that the increased demand will cause
the average price of refined CNO suitable
for utility use to be consistently higher than
imported diesel fuel.
• Lost tax and export earning revenue: imported
petroleum products are a major component of
revenue for the government. This is because
around 40% of the retail price of fuel is
government tax through a combination of
Value Added Tax, import duty and energy tax.
The import duty for petroleum products is at
VUV 26 per litre (/l) (about USD 0.29/l). This
means the loss of revenue runs into millions
of dollars if domestic CNO is used to replace
imported diesel fuel.
Solar energy
Solar has been a minor component of on-grid
generation. Only
70
kilowatt-peak (kWp) of solar
PV has been installed on the UNELCO Port Vila grid.
Another 20 kWp is on stream for UNELCO in Malekula,
and 40 kWp is connected to the VUI grid in Santo.
This consists of 20 kW supplying the Northern District
Hospital while both Samma provincial headquarters
and College de Santo receive 10 kW each.
The EU Energy Facility programme is now in
progress. It includes support for a 1 MW solar
installation to feed the Port Vila grid as well as
support for grid extensions to un-electrified periurban households. The site chosen for the 1 MW
solar farm is near the existing wind farm at Devil’s
Point, Northwest of Port Vila. The initial funding was
expected to have been derived from a combination
of funds from the Government of Vanuatu,
UNELCO and the EU. However, the Government of
Vanuatu has been unable to provide the required
co-finance for the project. This makes the status of
the project unclear though it still appears likely to
be implemented.
Vanuatu Sun Power has proposed a 1.1 MW solar PV
installation Southeast of Port Vila near the Teouma
River. It would be privately built and operated and
is under consideration by UNELCO and the URA.
If built, the installation would sell solar power to
UNELCO through a PPA.
In 2014, the United Arab Emirates–Pacific
Partnership Fund conducted a feasibility study
to develop three grid-connected installations in
Port Vila amounting in total to 501 kWp. These
would include a 357 kWp ground-mounted solar
panel array at Parliament House and a 44 kWp
rooftop installation and 100 kWp ground-mounted
installation at the Vanuatu Meteorology and GeoHazard Department (Meteo). When installed,
annual fuel savings are estimated at USD 233,674
at current fuel prices.
As with the 1 MWp installation enabled by the EU
fund, the United Arab Emirates–Pacific Partnership
Fund project would have little impact on the
tariff. The installations will be turned over to the
Government of Vanuatu, which plans to sell power
to UNELCO through a PPA. The project’s total
share of generation will only be a few percent.
Any change in the tariff to be expected from
this particular solar installation will therefore be
low, even if the government sells the power to
UNELCO at a low cost. However, the cost of solar
generation is fixed for the productive life of the
projects. This means that as diesel prices rise, the
rate of tariff increases slows down. At present,
Vanuatu primarily benefits from the planned gridconnected solar project by increasing its energy
security through an indigenous energy resource
and an improved export/import value ratio from
lower fuel imports.
As shown in figure 4, the UNELCO load at Port Vila
declines significantly and shifts its peak from day
to night-time at weekends and during holidays.
This makes it more difficult to match large scale
solar generation with the load. Without energy
storage, solar power appears to be a good match
for the load on weekdays but a relatively poor
match at weekends. If the proposed 2.6 MW solar
power comes on stream, it may be necessary to
take at least part of the solar power off stream at
weekends and holidays. This would avoid stability
problems caused by a 50% solar penetration of
the load at midday that could occur on a sunny
Sunday. Special control systems and/or storage
batteries could be installed to allow full solar
generation to be accepted by the grid. However,
the cost-effectiveness of that option will need to be
compared to any potential revenue loss resulting
from taking a proportion of solar power off the grid
at weekends.
Renewables Readiness Assessment 13
Figure 4: Port Vila load curve for weekdays and Sundays (2013)
Source: UNELCO
The proposed 2.6 MW solar power will probably
supply 10% of Vanuatu’s power needs. However,
along with the existing renewable energy inputs
from CNO, hydropower and wind, this should
be enough to provide over half Vanuatu’s power
generation through renewables. This would be
more than 10% greater than the 2015 NERM target
and less than 15% short of the NERM target of 65%
by 2020. The development of hydropower and
geothermal resources plus additional wind and
solar inputs should make it possible to meet or
exceed the 2020 NERM electricity generation goal.
Wind energy
Wind energy monitoring has indicated a resource
of 7.2 metres per second (m/s) at a 55 metre hub
height. As a result, UNELCO signed a contract to install
eleven 275 kW Vergnet wind turbines on tilt down6
towers at Devil’s Point near Port Vila. This amounts
to 3,025 kW of capacity developed with funding
through the European Investment Bank. Output has
varied considerably. The wind farm contributed 13.4%
of UNELCO power generation in August 2012. The
results are sufficient to indicate economic benefits
from additional wind installations in areas showing
reasonable wind speeds near population centres.
UNELCO is considering adding up to four 275 kW wind
turbines to the existing wind farm over the next year
or two.
In 2012, the EU awarded a project to the NGO
Vanuatu Renewable Energy and Power Association
6
(VANREPA) to install thirteen 420 W wind turbines
with fold-down towers. These are located at Futuna
and Aneityum in the South. The installations were
to include batteries to allow for power storage.
Although the equipment was procured and
delivered, the EU terminated the project for nonperformance, inadequate reporting and project
management problems.
The project focused on installing wind turbines at
key public institutions, and included the installation
of battery banks with sufficient capacity to enable
households to recharge home-based batteries. To
manage this project, a Renewable Energy Service
Cooperative was to be set up. A billing system for
energy delivered to users and for maintenance
services, rental of efficient lighting kits and
household battery recharging was to be established
to sustain the cooperative. Training would have
been provided on the operation, maintenance, and
financial management of the installed systems.
The project was also to identify and promote new
opportunities and income-generating activities for
local entrepreneurs. The components are currently
in storage. According to VANREPA, an additional
USD 70,000 is needed to complete the installations
and establish the necessary institutional structure.
To support the further development of wind
energy, a number of wind survey masts are now in
place collecting data. Through the Pacific Islands
Greenhouse Gas Abatement and Renewable
These types of tower are needed to protect the turbines during cyclone passages.
14 Vanuatu
Energy Project and the International Union for
the Conservation of Nature Oceania Regional
Office, the government has installed six 34 metre
wind monitoring towers. These are in each of the
six Vanuatu provinces, including Tanna, Tongoa,
Malekula, Santo, Pentecost and Vanua Lava. Remote
data logging is installed on some masts. They
transfer data directly to the project office on a daily
basis, making collection more reliable. In the second
phase of the project, local governments are pursuing
funding through the Secretariat for the Pacific
Regional Environment Programme for technical
assistance to analyse the data collected. This would
be the basis for a wind resource assessment and
map to confirm the resource potential.
Hydropower
Due to the relatively small size of the individual islands
and their limited watershed areas, few permanent
streams are large enough for cost-effective power
generation by the utilities. By 2013, the only
hydroelectric plant in Vanuatu connected to a utility
was on the Sarakata River in Espiritu Santo and serves
as part of the VUI generation mix (URA, 2010). It is a
run-of-river type of facility with a 1.2 MW capacity.
ADB carried out pre-feasibility studies for two
mini-hydropower sites in Vanuatu as part of its
‘Access to Rural Energy’ study. The Malahura site in
Malampa province would include 1.2 MW capacity
turbines with a dam and reservoir and 20 km of
transmission lines. The Wampo River at the Santo
site is proposed to be run-of-river with a 3 MW
capacity and associated transmission lines. The
proposal is to finance them both privately. However,
no investors had shown interest by 2013, as the
concessionary terms are not deemed attractive.
As the first step in a feasibility study for another
site, UNELCO has installed water flow monitoring
equipment on the Teauma River on Efate.
Besides these utility-grade projects, a few small
village or facility-specific pico-hydropower units
are in operation and more could be developed. On
Maewo, a 75 kW micro-hydropower project made
possible by Austrian and Italian funding through
the International Union of Conservation of Nature is
currently under construction. The first phase of the
project concentrates on the civil works, which include
the power house, and was due for completion by
2014. The second phase will focus on transmission,
distribution and household connections. However,
project completion is subject to funding availability.
Rural electrification activities
To support programmes seeking to provide
electricity access in rural areas, UNELCO set to
work on a Rural Electrification Master Plan in 2007
to examine over 3,000 sites. It identified 1,700
possible power generation sites that could provide
electricity to rural populations. Detailed design
work has been completed on 100 facilities. In 2007,
the first project was launched in Port Orly, located
at a remote part of Espiritu Santo, to provide CNOfuelled electricity to 300 families. Technically, the
project has worked reasonably well, though there
have been problems with oil supply, and fuel filters
have clogged up. The system runs for nine hours
a day during the week and 15 hours on Sundays.
The tariff is one of the highest in the Pacific at
150
VUV/kWh (around USD
1.60/kWh) and is
charged through prepayment meters.
In 2003, VANREPA, an Non-government
organisation, was established. The aim was
to manage renewable energy projects for
development partners and sell solar lighting kits
and energy efficient stoves through its retail spinoff
Green Power. Through Green Power, VANREPA
teamed up with the Vanuatu Women Development
Scheme to provide microfinance for pico-solar kits.
A World Bank programme concentrating on picosolar type devices helps fill the gap left when
Australia cancelled the VERD project. These have
panel capacities of around 5-30 Wp, one or two
small LED lights and a mobile phone charger. These
will be supplied to rural households. In line with
the NERM targets, this USD 15 million programme
is being developed to cover project preparation,
technical assistance and investment. These systems
may not be sufficient to provide power for rural
economic development as it is generally defined.
However, low cost devices of this type can provide
at least some of the electricity services desired by
rural households. If a system is set up to collect
and properly dispose of spent batteries and other
components, it can be a reasonable entry point for
the provision of basic rural electricity services.
The World Bank concept also includes the provision
of electricity access to approximately 600 schools
and health centres in rural areas without access to
electricity. This uses mini-/micro-grid solar installations
that would provide alternating current power for office
machines, education and health equipment.
2.6 INSTITUTIONAL FRAMEWORK
Department of Energy
Until early 2012, the Energy Unit within the Ministry
of Land and Natural Resources was responsible for
energy programmes in Vanuatu. The unit was then
renamed the Department of Energy, Mines, and
Mineral Development. However, its energy section
remained understaffed with only three permanent
employees and a small but varying number of
short-term staff paid by specific projects.
Renewables Readiness Assessment 15
In early 2013, a new Ministry of Climate
Change Adaptation, Meteorology, Geohazards,
Environment and Energy was formed. It included
the new DoE strengthened by new recruits. This was
responsibility for formulating and implementing
energy policies and legislation, managing energy
projects, and working with development partners
to prepare projects that need funding.
For many years, the government has faced major
energy challenges in the form of high electricity
costs and limited electricity coverage. Except for
concession areas served by UNELCO and VUI, it
is responsible for rural electrification, including
supervising facility design, installation, finance and
O&M. Given its very limited financial resources,
the government has previously dealt mainly with
externally funded, small-scale renewable energy
technologies. In recent years, renewable energy
projects have been financed primarily through
the Sarakata Special Reserve Fund (ALM, 2009),
using fuel savings from the 1995 Japanese-funded,
UNELCO-operated hydroelectric system near
Luganville. To replenish the fund, customers were
charged at the regular diesel generation rate.
The value of the fuel saved by the hydropower
installation was placed in the fund to finance rural
electrification projects, including grid extensions
and payments for Luganville street lighting.
However, an audit of the fund by the regulatory
authority in 2010 found major discrepancies, so
the fund was frozen and deactivated. In 2014, the
government agreed to allow the money still in the
fund to be used to cover its share of the EU Energy
Facility project for CNO development for the
electrification of villages in the provinces of Torba,
Penama, and Malampa.
Utilities Regulation Authority
With support from Australia, URA was established
in 2008 to regulate the utilities. On the basis of the
2007 Utility Regulatory Authority Act and its 2011
amendment, it primarily manages the electricity
concession agreements and the utilities operating in
those concession areas. URA itself consists of three
commissioners appointed in writing by the minister in
charge of finance. At least two of the commissioners
are citizens of Vanuatu. URA has greatly strengthened
regulatory supervision of the private utilities operating
in concession areas, and has also greatly increased
the transparency of tariff adjustments and utility
operations. The performance of Vanuatu utilities is
monitored under the Utility Regulatory Authority
Act. Any cost savings arising are to be passed on to
consumers through tariff adjustments mandated by
URA. The tariffs are designed to allow for full cost
recovery and a reasonable profit for the utilities. At
the same time, they meet the government’s needs
in providing affordable electricity access for the
16 Vanuatu
maximum number of Vanuatu inhabitants in the
concession areas.
URA is facing new challenges now that larger-scale
renewable energy systems are feeding the grid, both
managed by utilities and privately owned. These largescale renewable systems will increase the complexity
of setting tariffs, particularly regarding solar and
wind generation, which are variable renewable
energy sources. In recent months, it has published
net-metering and FIT regulations for private sector
grid-connected renewable energy generation. These
apply to small-scale installations like solar generators
on residential rooftops, and larger-scale Independent
Power Producers (IPPs) that will operate under a PPA
with the utilities.
A third area of future concern is the need to
establish and enforce safety and technical
standards for small public electricity systems
installed in rural Vanuatu outside existing utility
concession areas. Although basic electrical
utility standards have been established using an
Australian model, adjustments may be necessary
to meet conditions specific to Vanuatu. In future,
community and local government diesel mini-grids
may be converted to solar power. The proliferation
of many different types of designs for these miniutilities would make maintenance costly, as it must
then be tied to the company that sold and installed
the equipment. To avoid this problem, technical
standards and design guidelines for mini-grids,
particularly those powered by solar, may need to
be created and enforced. This will help ensure the
installations are consistent in design, and thereby
also in maintenance, and will use components
known to function satisfactorily and reliably in the
Vanuatu environment. Furthermore, standards and
guidelines of this kind help training institutions
focus maintenance training on common design
approaches across Vanuatu. This would make
maintenance less costly and more readily available.
2.7 ENERGY POLICIES
National Energy Policy 2009
In 2000, the Council of Ministers endorsed a vision
for a 100% renewable energy economy by 2010,
but no significant follow-up activities resulted. An
energy policy and action plan, the National Energy
Policy Framework, was prepared and endorsed
by the Council of Ministers in August 2010. This
process was assisted by the Pacific Community’s
Applied Geoscience and Technology Division. The
policy includes:
• reliable and affordable modernised forms of
energy for rural areas
• institutional reinforcement
• reliable and affordable urban electricity
• renewable energy promotion
• promotion of CNO as a biofuel through tax
incentives, national biofuel standards and
support for the coconut industry
• promotion of energy efficiency and conservation
Although the 2009 Energy Policy is technically still
in effect, its components have been incorporated
into NERM. This has become the primary basis for
energy planning and policy.
National Energy Road Map 2013–2020
The Vanuatu NERM was endorsed by the Council
of Ministers and publicly launched in 2014 as the
primary guiding document for energy planning.
Building on the National Energy Policy Framework
and associated strategy, it sets out targets and
priorities for energy delivery, increased electricity
access, affordability and energy security. It identifies
policy, legislative and regulatory changes needed
to enable the required investment in the energy
sector. This RRA aims to assist the government in
developing an action plan to reach the NERM goals.
The energy sector targets for 2020 are important
NERM components, as follows:
• electricity production: 40% of generation from
renewable energy by 2015 and 65% by 2020
• a 10% improvement in diesel generation
efficiency by 2015 and 20% by 2020
• access to electricity within concession areas:
75% of households connected to the grid by
2015, 90% by 2020 and 100% by 2030
• access to electricity close to concession areas:
33% of households connected to the grid by
2015, 90% by 2020 and 100% by 2030
• access to electricity in off-grid areas: 100%
household access to electricity via individual
home systems and basic power services by
2020
• access to electricity for public institutions: 90%
access by 2015 and 100% by 2020
• petroleum costs: reduce the distribution cost of
petroleum products by 5% in 2015 and 10% in
2020
• petroleum standards: improvements in health,
safety and environmental standards to be met
by all operators by 2020
NERM is intended to be the basis for attracting and
coordinating contributions to the energy sector by
development partners in Vanuatu in order to reach
the above targets.
Meeting the NERM targets will help mitigate climate
change by replacing fossil fuels with renewable energy,
but affordable energy is its major focus. As it states:
“…rather than an agenda of promoting renewable energy
driven solely by global climate change concerns as an
end in itself, increasing the share of renewable energy
substantially in Vanuatu - on and off-grid - is expected to
be the least-cost way to developing the sector.”
2.8 HUMAN CAPACITY
The Energy Policy, the Rural Electrification Master
Plan and NERM were created with local inputs from
stakeholders and strong support from outside Vanuatu.
The use of external capacity is required since there is
insufficient local capacity to carry out the tasks. These
development partners can be expected to continue to
work with the Government of Vanuatu towards meeting
the NERM targets and implementing the policies.
However, the capacity both in government and in the
private sector to sustain the benefits once they are
achieved is limited and needs to be rapidly developed. In
particular, capacity building for government institutions
in data acquisition, analysis and data management
is needed. Additionally, training in the use of existing
computer models for renewable energy development,
including HOMER and Retscreen, would be of value.
The rapid increase in off-grid installations that include
SHS and solar mini-grids will require extensive training
in solar system installation and maintenance. Existing
training institutions in Vanuatu will need help in
developing and conducting training courses. This will
prepare Ni-Vanuatu for operating and maintaining the
large numbers of off-grid renewable energy generators
and small-scale distribution systems intended to meet
local needs in rural areas.
While equipment and system design standardisation
will make the training programmes easier to design
and introduce, training needs remain substantial. Local
language training in the required technical fields will
thus need to be developed within secondary and
tertiary technical training institutions.
Furthermore, training in small business development
and operation will be required to support the facilities
implemented under NERM and other energy
development programmes.
Renewables Readiness Assessment 17
Wind Farm/Shutterstock
18 Vanuatu
III.
SCALING UP RENEWABLE ENERGY: RECOMMENDATIONS AND CHALLENGES
The scale-up of renewables in Vanuatu is driven forward by two interrelated fronts:
high electricity tariffs and the low overall rate of access to electricity. Electricity
is without doubt an important prerequisite for improving living standards and
economic growth.
The electricity needs can be met by scaling up renewable energy applications in
Vanuatu. This is thanks to the rich renewable energy resources the country benefits
from, as well as the dramatic decline in the cost of several renewable energy
technologies. This is the basis for the Government of Vanuatu’s NERM renewables
target of 65% of electricity generation by 2020.
However, reaching the targets would need more actively engaged players from
the private sector to deploy and operate additional renewable energy systems.
This would require immediate action with support from both government and
development partners. They need to overcome the key obstacles affecting private
sector participation in renewable energy development on both technical and nontechnical fronts.
The actions required to reach the NERM targets were discussed in stakeholder
interviews and group discussions. Although many actions are in progress, three
areas of concern were acknowledged to be of high priority for further development
to reach the NERM targets. These are as follows:
• policies and coordination for effectively implementing NERM
• grid-connected renewable energy development
• off-grid renewable energy development
3.1 EFFECTIVE IMPLEMENTATION OF N.E.RM.: POLICY REVIEW
AND DEVELOPMENT-PARTNER COORDINATION
Context
Energy development in Vanuatu is largely the result of DoE, URA, utility,
development partner and private sector actions. To meet the NERM targets,
effective cooperation and coordination of these stakeholders will be necessary.
Each stakeholder must have clearly defined authority and responsibilities under
the legislative frameworks for achieving the NERM targets.
The RRA workshop discussions have shown that the existing legislative frameworks
and policies are largely adequate in terms of developing desired renewable
energy action and projects needed for NERM implementation. However, some
revisions may be needed. In particular, legislation is lacking related to institutional
responsibility for off-grid standards and structures. Also lacking is a legislated
basis for DoE, thereby making it more vulnerable to radical changes in its structure
according to changes in government.
Renewables Readiness Assessment 19
Challenges
Within the political and development partner
framework, the following challenges need to be
addressed:
URA, the legislation should give another agency
the authority and responsibility to set and enforce
standards and guidelines for off-grid solar. DoE
could be a suitable candidate for this task.
• To carry out the actions necessary to achieve the
NERM target, the relatively new DoE and URA
may need additional authority and resources.
There is a need for greater clarity on the
institutional roles, functions and responsibilities
of each of these two important entities. The
capacity they should build to take the actions
needed to achieve the NERM targets requires
greater clarity.
Action 2: support URA and DoE roles in
fulfilling the NERM
• Effective coordination of development partner
activities has been a persistent challenge.
Renewable energy projects have been largely
driven by donors with a lack of effective
coordination between each another. This has
often resulted in the isolated implementation of
individual projects that would have otherwise
benefited from sharing experiences. If
development partner resources were deployed
more effectively, project results would be
more sustainable. Another problem caused
by ineffective intra-donor coordination is the
lack of standardisation in project designs and
components. This means it is challenging
to build local installation and maintenance
capacity and develop a proper inventory of
spare parts needed to sustain project operation
supported by different development partners.
Recommended actions
Action 1: review enabling legislation and policies
relating to URA and DoE powers and duties
An overall review of existing legislation and policies
is needed, with the aim of proposing required
changes and additions. This will clearly define the
necessary DoE and URA institutional authority and
responsibility to properly carry out the actions
to achieve the NERM targets. The review can be
carried out jointly with other key stakeholders.
This would be particularly applicable for rural
electrification, given that it suffers from a
significant lack of coordination and regulation.
For example, it has been widely recognised that
off-grid SHS and solar mini-grid installations
are unlikely to be sustained without proper
standardisation and institutional supervision.
However, the legislation justifying URA focuses on
utility regulation, and may not allow it to establish
standards or regulations for private off-grid selfgeneration. Enabling legislation may be necessary
to allow URA to extend its regulation to establish
off-grid standards and design guidelines for SHS
and mini-/micro-grids used for self-generation.
If that is not considered an appropriate task for
20 Vanuatu
An operational plan including human resources,
physical requirements and financial resources and
their budgets would naturally follow from a definition
of the institutions’ roles and responsibilities. This
would enable the two agencies to carry out the
programmes and take action to achieve the NERM
targets. The operational plan would provide a
basis for DoE and URA to communicate with the
Government of Vanuatu and/or development
partners to seek budgetary support. The resources
sought in the proposed plan should be adequate to
implement the planned actions through to 2020 to
ensure targets are reached.
Action 3: facilitate coordination among
development partners
In partnership with URA, DoE should prepare
project documents designed to carry out the
actions needed to reach the NERM targets, and
circulate them among development partners for
their input and commitment. This would effectively
use the resources from the development
community. Working closely with donor agencies
would help ensure that renewable energy projects
are implemented in a coordinated fashion. This
not only reduces any overlapping efforts but also
makes sure the national technical standards are
applied by project implementers/developers.
3.2 GRID-CONNECTED RENEWABLES
Context
Thus far, wind development has been largely
limited to Devil’s Point near Port Vila, the site of
a 3 MW installation. Expansion is planned for 2014
and 2015.
Only relatively small solar generation systems
have been connected to the grid, and all of those
are owned either by a utility or government.
Installations by commercial or residential users or
investors and developers have yet to appear. As
discussed above, it would make sense to draw on
private sector resources to scale up investments in
renewable energy so the target of 65% by 2020 is
achieved cost-effectively.
Following the RRA workshop, URA announced
its preliminary decision on net-metering and FITs
in May 2014 and requested public comments.
Following that feedback, a final order was issued
in August 2014. This allows low voltage small
commercial and residential customers to connect
their private solar installations to the grid, provided
the installation complies with technical standards.
As a further measure, URA also announced its
decision in June 2014 to pursue the development
of regulatory guidelines for IPPs and PPAs. This
is considered an important step towards opening
up the power market to IPPs on the Port Vila
grid. Another 1.5 MW solar generation capacity
is proposed for the Port Vila grid over the next
few years. An IPP of 1 MW would be expected to
provide this, with the rest from the Government
of Vanuatu. Additionally, URA has received an
application to install a private 1.1 MW solar plant
through an IPP. Negotiations for a PPA will be
needed if the decision is made to proceed with this
development.
Challenges
Although the UNELCO 3
MW wind farm is
successful, adding the proposed 2.6 MW solar
installation along with another 1.1 MW wind capacity
may cause problems for the Port Vila grid. If a large
number of small-scale solar PV installations are
also connected to Port Vila distribution lines, they
will cause additional concerns from a technical
perspective. This is explained below.
• The capacity of each grid to accept electricity
inputs from variable renewable energy sources
at various points on each grid is unclear.
Distributed generation, typically involving
rooftop solar PV, might raise less concern about
instability in the grid compared to large-scale
solar/wind farms configured as centralised
power generation facilities.
• There are no published standards for gridconnected renewables specifically for Vanuatu,
although a blanket basic standard that follows
those of Australia is in effect. Clear regulations,
technical standards specific to Vanuatu’s
environmental
conditions,
operational
standards and the legal basis for interconnection
with the concessionaire’s grid need to be made
clear to all parties. This would help develop
significant private sector involvement with IPPs
and net-metering.
Besides these technical matters, the utilities also
have financial concerns regarding grid-connected
generators owned by customers. This is because
the installations will, in effect, take those customers
off the grid, while still expecting the utility to
provide backup power on demand.
A further challenge is the lack of experience in
running grid-connected renewable energy systems
within Vanuatu’s commercial and industrial sector.
Building capacity to support the installation and
maintenance of these systems will be necessary if
they are to be sustained in the long term. Capacity
building may also be needed within the utilities to
prepare staff for inspection, standards enforcement
and monitoring renewable energy installations.
Financing investment in small-scale renewable
energy generators for buildings is a final challenge.
In particular, the government will need the financial
resources from development partners to install
renewable energy generation on government
facilities. The private sector will need banks to
supply affordable finance to install renewable
energy generators on its buildings.
These concerns translate into private sector
challenges, which could jeopardise investor
confidence for investing in grid-connected
distributed generation from variable renewable
sources. Such issues should therefore be effectively
addressed.
Recommended actions
Action 1: conduct a grid assessment study focusing
on grid stability
A computer model of the grid (Port Vila, Luganville,
Tanna and Lakatoro) needs to be constructed. This
will allow the Government of Vanuatu and utilities
to determine and predict the effect of potential
irregular input changes at entry points on the grid
when solar or wind generation is connected. The
model will help utilities assess the extent of the
impact and will help prevent them from arbitrarily
refusing a connection because of its unknown
effects. Each of the grids therefore needs to be
assessed and modelled using an appropriate
software tool. The model will help the utilities
predict the effect of rapidly fluctuating input
changes at any point on their grid. It will help the
Government of Vanuatu ensure that connections
are not arbitrarily denied without clear cause.
To make the model results more useful, a
comprehensive grid evaluation is required including
the present state of the infrastructure and quality
of service. This would minimise potential grid
operation issues caused by variable renewable
energy sources.
The completion of this proposed study should
be followed by a training programme. This would
equip the utilities with the knowledge necessary
to use the model and understand its results. They
could then predict the effects of different types
and sizes of renewable energy generators to be
Renewables Readiness Assessment 21
connected to the grid at various points. Utility staff
will also need to be trained in modifying the model
when there are changes to the grid. Given the lack
of experience in this area in Vanuatu, technical
assistance will be needed to both develop and
apply the model.
to access low interest funds that can be provided
by multilateral development banks. These can
make arrangements for financing the purchase and
installation of private grid-connected renewable
power generation.
Action 2: prepare and publish comprehensive
standards for grid-connected renewables specific
to Vanuatu conditions
3.3 Off-grid renewables
In association with UNELCO and DoE, URA needs to
establish specific standards relating to equipment
used for private grid-connected renewable energy
generation, systems design and construction, and grid
connection techniques. These standards may largely
be the same as those used in Australia. However,
changes and additional sections are probably required
to address the difficult environmental conditions
found in Vanuatu. This includes salt corrosion, high
humidity, high ambient temperatures and cyclones.
Action 3: training and capacity building
Local contractors will need to be trained to
understand the standards and guidelines for
renewable energy installations and competently
build and maintain the systems. Capacity for
inspection and monitoring, as well as compliance
activity to confirm that installations continue to
comply with applicable standards and are safe
for grid connection. For the capacity building to
be available for the long term, it will be necessary
to work with local training facilities. These include
Vanuatu National Training Council, Vanuatu Institute
of Technology and the Vanuatu Rural Development
and Training Centre Association, among others.
They can provide training relevant to the renewable
technologies utilised. Programmes for training and
certification of solar technicians exist within the
Sustainable Energy Industries Association of the
Pacific Islands (SEIAPI) framework and could be
used in Vanuatu. However, minor modifications
may be needed to adapt them to local conditions.
Action 4: finance for private sector installation of
grid-connected renewables
If the NERM targets are to be reached, the
Government of Vanuatu should consider using the
funds provided by development partners to finance
grid-connected solar generators on its own office
buildings.7 This process has already begun since the
United Arab Emirates funded grid-connected solar
projects for the government’s Meteo office and the
parliament building. In addition, the Government of
Vanuatu should consider working with local banks
7
Often air-conditioned, thus consuming a large amount of electricity.
22 Vanuatu
Context
The NERM goals include access to electricity for
100% of households by 2020 through individual
home systems and basic power products.
Approximately 67% of Vanuatu households have
no access to electricity; around 17% of these are
urban and 83% rural. If VERD can be funded by the
Government of New Zealand through the World
Bank, it looks as if it will be possible to achieve this
particular target under NERM.
Challenges
Perhaps the biggest challenge to off-grid renewable
energy systems is sustaining them. The critical rural
electrification challenge is not so much technology
but rather the lack of good institutional structure
and human capacity to provide the proper O&M.
Given the remoteness of Vanuatu rural communities
and their lack of economic activity, special
attention must be given to the type of institutional
arrangements for sustaining rural energy systems.
These should place emphasis on the maintenance
of the energy system and the provision of sufficient
funding for its operations. Furthermore, the NERM
operational plan needs to support DoE institutional
capacity for implementing and sustaining projects.
This action plan must take into account the
allocation of resources to enable a critical review
of DoE institutional structure and staff needs. This
is because the current DoE structure is designed to
support VERD implementation - not that of NERM.
The remoteness of the installations is a clear
disadvantage. It makes O&M challenging from
both technical and non-technical perspectives.
The effectiveness of different business models
depends on specific local settings. In Vanuatu,
it looks as if community and end-user O&M has
not worked. Despite project designs that have
included arrangements to collect sufficient
money from users to pay for all O&M costs, user
payments have not been consistent. In some cases,
the funds collected have typically been used for
other purposes. As a result, most of these projects
cannot be sustained once batteries collapse. The
battery is a crucial component of the system,
and ensures the availability of electricity when
the renewable energy resources are low or not
available at all. However, the need for batteries
increases the cost of energy delivered by the
installation, and greatly increases the cost and
difficulty of sustaining off-grid installation. It also
adds a layer of environmental management. This
is because lead-acid and nickel-cadmium batteries
in particular are an environmental hazard if not
disposed of properly. Implementing a system for
recycling spent batteries is a difficult but essential
part of the off-grid electrification process, but this
has yet to be addressed.
There are other major concerns. One is the lack of
national standards and guidelines for designing offgrid solar or wind systems for public installations
like schools and health centres. Another is O&M
of privately owned renewable energy equipment
used for supplying electricity to private premises.
As a result, each project created to install solar or
wind systems is likely to use different components,
different installation standards and different
approaches to keeping the installations going.
This means it is difficult and expensive to devise
training programmes and ensure local shops
and contractors to stock sufficient spare parts.
Moreover, the lack of standards and design and
maintenance guidelines may lead to the promotion
and use of components unsuited to the Vanuatu
environment.
Major investments in rural tourist facilities
are anticipated, because tourism is growing,
particularly in areas distant from existing grids.
Facility developers for off-grid tourism are likely
to propose diesel generation to meet electricity
demand. Today, solar mini-grids can provide
cheaper power than diesel in rural areas, and
should be promoted by DoE instead of small dieselpowered grids. However, the lack of maintenance
and installation capacity in rural areas will need to
be overcome to achieve widespread acceptance of
solar mini-grids for off-grid tourism facilities.
Recommended actions
A workable institutional structure is needed for a
number of purposes. These include sustaining offgrid installations, creating and enforcing necessary
standards and guidelines, capacity building to
develop skills for design, installation and O&M,
and encouraging private investment in off-grid
renewable energy. The following actions are
proposed to address this issue.
Action 1: design an institutional approach
for sustaining SHS off-grid electrification of
households and public buildings
An institutional structure is required to meet the
need for sustained O&M of off-grid renewable
power systems at an acceptable cost to end-users.
The community O&M approach tried without success
in Vanuatu has also not worked well elsewhere
in the Pacific. DoE should review the institutional
approaches used in Fiji, Tonga, the Solomon Islands
and Kiribati that have been relatively successful in
sustaining rural SHS installations. It should work
with them to design a structure adapted to Vanuatu.
Over 10,000 SHS installations (ranging from 100 Wp
each in Kiribati to 200 Wp each in the Marshall
Islands) provide enough electrical services for users
to have multiple lights, radios, and mobile phone
and portable light charging.
They can provide a level of service comparable to
that usually accessed by households connected
to rural grid extensions, and can therefore be
considered full rural electrification.
The most successful institutional approaches have
used a combination of external and local support.
They include arrangements to collect reasonable
O&M fees, either as cash or, in the case of the
Solomon Islands, in the form of agricultural produce
or handicrafts with a known value. Technical
support may be provided by a contractor, as in
Fiji, or by a locally trained person supported by
the energy ministry, as in Tonga. Alternatively this
could be supplied by an organisation specifically
formed to support rural solar installations, as in
Kiribati and the Solomon Islands. The experience
of these countries has been shaped over more than
two decades of trial and error. This should be used
when designing an institutional structure for SHS
and mini-/micro-grid rural solar implementation
best adapted to Vanuatu conditions.
Despite this, Vanuatu is unique in the Pacific because
it has a large remote off-grid rural population
with a high mobile phone penetration. The mobile
phone network could be useful in developing a
methodology for sustaining SHS and other forms of
off-grid electrification as well as for communicating
support requests. This could form a solid foundation
for creating a workable institutional approach to
sustaining SHS for off-grid electrification. Allowing
customer payments through the mobile phone
network should also be considered.
Renewables Readiness Assessment 23
Action 2: develop standard designs for SHS and
solar mini-grids
For long life and reliable service, off-grid designs
need to fulfil environmental requirements while
meeting the loads of Vanuatu rural public facilities
and households. The designs for SHS and solar
mini-grids should be modular so that installations
of various sizes can be produced using the same
components. This approach can help ensure that
end-users receive the appropriate size of installation
for their needs and that maintenance requirements
can be satisfied at the lowest possible cost.
This is important for the coordination of overall
donor activities relating to the renewables sector.
It also helps develop government institutional
capacity to sustain the operation of the energy
system. Projects are often driven by donors, but
very little is done to coordinate their activity. This
has led to different system designs for each project
and difficulty in maintaining the systems in the
long term. Standard designs for renewable energy
projects will help ensure effective coordination and
will allow resources and experience to be shared.
This can benefit DoE, private sector contractors
and individual projects.
In recent years, the solar power cost has fallen
sharply. Solar mini-grids now usually have a lower
generation cost than rural diesel generation. They
should thus be the preferred option for village
electrification, remote tourist facilities or the
electrification of larger rural public facilities like
hospitals and schools.
DoE should work with suppliers and external experts
to prepare a standard modular design that would
work well in Vanuatu for these types of installations.
A standard modular design would consist of a
specified set of panels, batteries, charge controllers
and, in the case of mini-grids, stand-alone inverters
for power production. The standard design should
be very specific and include only components
selected as appropriate for Vanuatu. Development
partners and private investors should be required
to meet these standards. To obtain increased
power levels, multiple standard modules can
be connected to expand the capacity of the
overall system. Through this modular approach,
maintenance can be standardised, spare parts
stocks more easily maintained, and construction
greatly simplified.
A standard modular design for mini-grids of this
type has been created by the New Zealand Ministry
of Foreign Affairs and Trade. It has been used to
24 Vanuatu
convert diesel mini-grids to solar in Tokelau, the
Cook Islands and Tuvalu, and could be applied to
Vanuatu with only minor modifications.
Action 3: enhance capacity for sustaining off-grid
solar technology
It is not practical for contractors, government
or the utilities to provide the necessary training
on a regular, continuing basis. Vanuatu has local
educational institutions aware of the need. If
properly supported, they can do a good job of
providing this training.
It is recommended that the necessary courses for
off-grid SHS installations and solar mini-grids be
developed through local educational institutions.
These courses need to become available within
long-term training programmes for solar PV
installers and maintenance personnel. Due to
the use of battery storage and high current, low
voltage direct current inputs, this training will be
substantially different from that required to sustain
on-grid solar generation.
Action 4: develop a strategy for increasing access
to electricity in rural areas
In association with the World Bank programme
for expanding rural electricity access in Vanuatu,
a detailed strategy is recommended to rapidly
increase renewable power provision to rural
households and villages. A review of past
programmes is critical to determine the reasons
for their problems and failures.
Strategies should be developed to expand rural
electrification in a programmatic and rational
manner that will efficiently use the resources
available. Furthermore, identifying selection
criteria for the type of electrification best suited
to the target areas is required. This will determine
whether village electrification should take the
form of a solar mini-grid, SHS on an individual
household, a grid extension to the area, pico-solar
device distribution or some combination of these.
Action 5: conduct an off-grid electricity market
study for tourism
To evaluate the market for solar mini-grids, it is
essential to work with tourism authorities and
the private sector. Only then can solar mini-grids
replace diesel generation in tourist facilities. If
market demand is sufficient, a programme must be
established to promote the installation of solar minigrids in newly constructed facilities. The programme
should include attractive finance arrangements for
the private sector for such installations.
IV. THE WAY FORWARD:
STRATEGIES AND ACTION
The following table identifies the recommended actions emerging from the RRA
that are not already being implemented. While the RRA brings together the widest
possible range of stakeholders to identify and discuss renewable energy in Vanuatu,
this activity is only a snapshot of the situation. It includes recommendations at the
time of the RRA.
Many other issues and actions needed are undoubtedly present and must be
taken into account. While the assembled stakeholders recognised these actions as
important, they are not in any particular order of priority.
Table 3: Overview of recommended actions emerging from the RRA
Policy, regulation and
legislation: identify any
gaps in background policies,
regulations and legislation
that may cause failure to
reach any of the NERM
targets
• review enabling legislation and other
documents relating to DoE powers and duties
and align them with NERM needs
• support URA and DoE roles in NERM
• facilitate coordination among development
partners
• prepare dynamic models of the Vanuatu grids
On-grid renewable energy:
actions to work towards
the NERM target of 65% of
electricity generation from
renewable energy
• prepare
and
publish
comprehensive
standards for grid-connected renewables
specific to Vanuatu conditions
• train and build capacity of local contractors
and monitoring officials
• finance private sector installation of gridconnected renewables
• design an institutional approach for sustained
operation of SHS for off-grid electrification of
households and public buildings
Off-grid electricity access:
actions to work towards the
target of 100% access in
Vanuatu by 2020
• develop standard designs for SHS and solar
mini-grids
• build capacity for sustained off-grid solar
technology
• develop a strategy to increase access to
electricity in rural areas
• off grid market study
These recommended actions have been combined where possible. Seven major
activities have been defined to help create the foundations for renewable energy
development and support NERM. The strategy is not to create specific hardware
implementation projects but rather to minimise the barriers to implementing
sustained renewable energy projects. The activities selected are described below.
Renewables Readiness Assessment 25
ACTIVITY 1
Ensure that the policies, regulations and legislation are in place as needed to support NERM
Sector(s)
Policy, regulation and legislation
NERM is the driving document for renewable energy with its very
specific targets and time scale. The necessary policy, legal, regulatory
and implementation structure is needed to achieve the targets. The two
primary actors in implementing NERM are DoE and URA. This activity is
intended to help ensure that these two institutions have the resources
and legal support to carry out their respective tasks.
Description
• Determine the activities necessary to complete NERM and
reach its targets. Review those activities and define the actions,
responsibilities and associated authority needed by DoE and URA
to fulfil their roles.
• Write the necessary regulations, policies and legislation to allow
NERM to be implemented properly to meet its targets.
• Obtain and provide the resources considered critical for DoE and URA
to carry out all the activities necessary to meet the NERM targets
Actors
Timeframe
DoE, UNELCO, VUI, URA, Ministry of Finance, Ministry of Justice and
Social Welfare, World Bank, other development partners
12 months
As a key precondition, NERM must be considered one of the very highest
priority government actions. Availability of the relevant resources will
depend on the priorities the government sets for implementing NERM.
Keys to success
• effective cooperation, coordination and collaboration among
stakeholders
• external expertise made available to assist as needed through
development partner support
ACTIVITY 2
Prepare dynamic models of the four concession grids to evaluate the acceptability of connecting solar or
wind at various grid entry points
Sector(s)
On-grid renewable energy
Description
Each of the four concession grids has different characteristics and
will react differently to external inputs from renewable generators.
Each of the grids should be modelled using internationally recognised
software. This needs to provide a reliable prediction of the dynamic
response of the grid to renewable energy inputs of various types and
amounts at any point on the grid. This will help the utilities determine
whether proposals for additional generation from IPPs of all sizes can
be accommodated safely on the grid without causing any concern for
grid stability. Training will also be required on the use of the model and
its applications to match any modifications made to the grid.
Actors
Timeframe
UNELCO, VUI, development partners
8 months
• availability of data from the utilities for input into the model
Keys to success
26 Vanuatu
• adequate funding to model all four grids
• use of a model complex enough to provide dynamic response
data, and simple enough for use by local utility personnel following
reasonable on-site training
ACTIVITY 3
Create national standards for on-grid solar installations
Sector(s)
On-grid renewable energy
Description
Standards and design guidelines are needed for grid-connected
renewable energy installations. This will ensure that renewable energy
implementation by development partners and private developers/
investors is appropriate for Vanuatu. It will minimise the variety of
designs and components installed throughout the country. With design
standardisation, components and activities based on best practice
compiled from the Pacific region and the rest of the world, O&M costs
can be minimised and training requirements simplified. This would also
help provide a level playing field for investment by locking out cheap
but low quality installations that may pose a hazard either to the owner
or the utility.
Actors
Timeframe
DoE, UNELCO, VUI, URA
18 months
Technical standards for grid-connected renewable energy systems that
focus on safety and general good practice can be based primarily on
industrialised country standards. They can be sourced from Australia
and New Zealand, Europe or the US. Specific design guidelines should
be based on successful implementations of similar systems within
Pacific islands with tropical, wet, hot and salty environments and
occasional cyclone passages. Assistance from SEIAPI and development
partners will be useful as well as ‘South-South’ discussions with other
Pacific island countries and territories that have renewable energy
standards in place.
Keys to success
• Before any standards can be set, an agency must be named by
the government to develop and enforce them, presumably either
DoE or URA. That agency will need to take the lead in establishing
standards.
• Support from development partners will be needed to enable the
necessary interactions with other Pacific island communities and
SEIAPI.
• Standards and guidelines need to be set up as quickly as possible
to clearly define the renewable energy market before the
implementation of large-scale NERM commitments has begun.
Renewables Readiness Assessment 27
ACTIVITY 4
Create an institutional approach for off-grid SHS and mini-grid system O&M based on prior experience in
other Pacific island countries and territories, as well as failed projects in Vanuatu.
Sector(s)
Description
Off-grid renewable energy
Throughout the Pacific, off-grid solar installations have rarely lasted
long. This is mainly because of the lack of an institutional structure
responsible for obtaining and retaining the funds necessary to replace
exhausted batteries. For a 200 Wp SHS, for example, a monthly
collection of VUV 700 per month can accumulate enough to replace
a good quality battery at the end of its 7-10 year life. However, it has
proved to be very difficult both to make the necessary collection from
users and prevent the collected money to be used for other purposes.
The same problem has occurred with public facilities using solar minigrids and larger SHS installations. Over the past 20 years, countries
with a large number of off-grid installations have evolved institutional
structures that provide reasonably well for long-term maintenance and
battery replacements. Access to Tongan, Fijian, Solomon Island and
Kiribati experience would be very useful to inform off-grid electrification
that includes SHS and mini-grids on schools, health centres and some
households. It would help create a design for an off-grid institutional
structure that could function well in Vanuatu.
• Promote and participate in a symposium dedicated to
communicating both successes and failures in sustaining systems in
countries with large numbers of off-grid solar installations.
• Draw on the experience of mobile phone operators with off-grid
facilities, as well as those using solar to power those facilities.
Specifically, their experience of remote solar power system O&M
should be considered when designing the off-grid management
institution.
Actors
Timeframe
DoE, local contractors, Digicel, Telecom Vanuatu, URA, Ministry of
Education, Ministry of Health
10 months
The Ministry of Education and the Ministry of Health are to receive large
numbers of solar installations for rural facilities and for staff households
of those facilities. They must agree to support the sustainable operation
and maintenance of solar power systems in those facilities.
Keys to success
• Information from other Pacific islands and from local off-grid solar
projects is used for criteria to design the institutional approach for
Vanuatu to avoid unnecessary repeated mistakes made in other
Pacific islands.
• The structure created needs to have its own resources allocated and
not depend on other agencies
28 Vanuatu
ACTIVITY 5
Prepare a standard, modular design for SHS suited to a wide range of requirements
Sector(s)
Off-grid renewable energy
Description
SHS are the mainstay of off-grid rural electrification in remote rural
areas for most Pacific island countries. However, keeping them running
in the long term has been difficult. The inconsistent use of components
and designs has been one serious problem with SHS in several island
countries, including Vanuatu. This makes it difficult to provide training
for maintenance personnel and stock spare parts. In particular, the use
of different batteries for different installations has made proper battery
replacement difficult, since spare batteries have limited shelf life and
are expensive to stock. Where possible, all installations should thus use
the same standard batteries connected in different ways to achieve
different system capacities. For example, a basic design can be created
at 12 V, an intermediate one at 24 V and a large one at 48 V. Each can
use the same battery unit but doubling system voltage will also double
the kWh capacity of the SHS.
Actors
Timeframe
DoE, UNELCO, VUI, URA, local contractors, development partners
6 months
The designs should be based on Pacific island experience. All
components must be known to provide reliable service and meet the
stringent environmental requirements of the islands.
Keys to success
• It is impractical to maintain a large stock of spare batteries. It is
therefore important that the same model of battery is used for all
installations, and that the chosen battery is readily available off-theshelf from suppliers.
• Because of the high cost of accessing remote sites for service and
component replacements, only high quality components used in a
conservative design should be considered.
Renewables Readiness Assessment 29
ACTIVITY 6
Prepare a standard, modular design for solar mini-grids suited to a wide range of requirements.
Sector(s)
Off-grid renewable energy
Description
Solar mini-grids have been successfully used to replace small diesel
power systems. It appears likely, therefore, that a number of solar minigrids will be installed for rural public buildings and off-grid tourist and
commercial establishments over the course of NERM. Based on past
experience in the Pacific, a key component to their success is availability
of capacity to properly install and maintain the systems. This is a very
serious issue for rural Vanuatu given the difficulty of access to many
rural sites. To ensure adequate capacity for their installation O&M in
place, there needs to be reasonable commonality in the design and
choice of components for solar mini-grids. A number of simple units
consisting of modestly sized individual solar generation modules can
be combined to create a complete solar mini-grid system well into
the hundreds of kilowatts. This has been shown by New Zealand in its
support of outer island solar mini-grids for Pacific island communities.
This modular approach allows installation and maintenance training
on a fixed, consistent, single small generation module design rather
than a wide range of systems of varying sizes and configurations. This
approach also greatly reduces the need to maintain a stock of a wide
variety of spare parts to suit varying system sizes.
Actors
DoE, UNELCO, VUI, URA, local contractors, external experts,
development partners
Timeframe
6 months
The designs must be based on Pacific island experience that clearly
demonstrates all components can meet the stringent environmental
requirements of the islands while still providing reliable service.
Keys to success
• enter into discussions with the New Zealand Ministry of Foreign
Affairs and Trade regarding its standard design for remote island
mini-grids
• representatives from Vanuatu, preferably including local contractors,
should visit installations in either Tokelau, Cook Islands or Tuvalu
that follow those standard designs
• obtain the required funding for field visits and external expertise
30 Vanuatu
ACTIVITY 7
Capacity building for on-grid and off-grid renewable energy technologies
Sector(s)
On-grid and off-grid renewable energy
Description
To meet the NERM targets, a number of on and off-grid installations
will be required. While installations owned by the utilities can use
in-house capacity, little capacity exists outside the utilities that can
provide proper installation and maintenance of these renewable energy
systems. Training on the standard hardware selected for renewable
installations under NERM, and on the basic principles involved in
installation, will be essential for them to last in the long term.
Actors
Technical training institutions such as University of the South Pacific,
Vanuatu Institute of Technology, Vanuatu National Training Council,
DoE, Ministry of Education, development partners, SEIAPI
Timeframe
24 months
Standard designs are needed for on-grid and off-grid renewable
energy installations before hands-on training in those technologies
can take place. Lecture-based course content can be prepared prior
to any actual construction. However, in the long term, training should
concentrate on hands-on experience in the actual designs that would
be used in Vanuatu. This is because the intention is to prepare local
people for installation and maintenance, not design and procurement.
• modify existing courses from Australia and New Zealand for on-grid
solar and wind adapted to Vanuatu needs
Keys to success
• work with DoE and URA to be sure training will cover the areas
appropriate to installation and maintenance of renewable energy
systems in Vanuatu
• access SEIAPI and other Pacific institutional and individual expertise
on the types of renewable energy installations appropriate for
Vanuatu
• work with external experts to develop and implement a training for
trainers course to prepare Vanuatu instructors to present the course
• work with development partners to obtain necessary laboratory
and classroom materials for the training
• obtain funding to provide the training of trainers and to acquire the
necessary materials for hands-on and classroom training
Renewables Readiness Assessment 31
Activity 8
Finance for increasing private investment in renewable energy and energy efficiency
Sector(s)
On-grid and off-grid renewable energy and energy efficiency
Description
Investment in solar and wind energy and in energy efficiency
improvements is heavily loaded at the front end. Once the investment
is made, running costs are typically modest. It is therefore important
to make finance available for the initial purchase to generate interest
from potential investors. A commitment to low interest loan funds from
international development banks is recommended. The fund should be
channelled through a local financial institution specifically targeting
qualified renewable energy investments in Vanuatu.
Actors
Local financial institutions, DoE, URA, multilateral development banks,
external experts, development partners
Timeframe
60 months
Establishing standards early on for renewable energy equipment to be
installed by private investors will be important. They will need to be
in place to determine whether proposed investments are qualified to
obtain the loan funds.
Keys to success
• an agency is named to establish standards for renewable energy
installations, and those standards are created
• availability of low interest loan funds for renewable energy
implementation
• availability of funds or services from development partners to
access the required external expertise
32 Vanuatu
V. REFERENCES
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